Key Insights:
- Bitcoin price in focus as BTC ETFs just recorded the highest daily spot inflows since November 11 last year.
- Whales and exchanges with balances over 1,000 BTC have been aggressively adding to their balances in late 2025.
- Bitcoin Sharpe ratio turns negative. Here’s why this could be good for the BTC bull.
Bitcoin price has been building up bullish momentum in the last 2 days, highlighting a bullish start in 2026. Preliminary data revealed interesting positioning in the Bitcoin ETF segment and the whale cohort.
BTC ETF flows were mostly negative in December, indicating that institutional holders were dumping and contributing to the BTC price downside. Although it is still too early to tell whether a pivot is in full swing, the market has been showing signs of recovery.
One of those signs was the fact that Bitcoin ETF flows concluded Friday in the green, but that’s not all. ETFs recorded $471 million in net inflows on Friday, which was the highest daily inflows observed since November 11.
The Bitcoin ETF net inflows contributed to the price uptick on Friday, while also boosting bullish confidence. Despite this observation, Bitcoin’s large order flows since January 1 have remained relatively weak, indicating weak demand follow-through among whales.
Whale Accumulation Hints at a Bullish Bitcoin Price Pivot
While the market concluded the second half of the year deep in the red, analysts have been keen on dip buying. Large order book data on exchanges demonstrated weak demand over the last few weeks.
However, deeper market data suggests that large whales have been accumulating Bitcoin at a discounted price. Recent data revealed that Bitcoin balances on addresses with over 1,000 BTC surged aggressively over the last few days.
According to the above data, Bitcoin whale addresses engaged in the sharpest accumulation wave observed in more than 2 years.
This was an important observation because whales often buy back when they are convinced that a trend is at or near its bottom.
This accumulation surge suggests that whales might be convinced that the Bitcoin price was on the verge of a major recovery. This also aligned with the large buy observed in the Bitcoin ETF segment on Friday.
Why Bitcoin Sharpe Ratio in Focus Now?
The Sharpe ratio has historically been used to measure risk-return on volatile assets. In the Bitcoin price case, it recently dipped into negative territory, indicating that it was trading below its risk-free rate.
Companies like Metaplanet and MicroStrategy rely heavily on the Bitcoin Sharpe ratio for their strategies. The ratio may still dip further into negative territory, as was the case multiple times in the past.
While a negative Sharpe ratio may signal heavy losses, it may also point to accumulation opportunities. It may thus signal that the market is now in an attractive buy-back zone. Demand has historically made a comeback while the ratio dips into negative territory.
Interestingly, this observation also aligned with previous data, which indicated that sell pressure momentum cooled off substantially. In other words, Bitcoin (BTC) price has started off January 2026 with changing demand dynamics that may offer insights into what to expect ahead.
Although these data points have been building up a bullish bias, the market was still at risk of a potential surprise downside. Especially factoring in that the latest Bitcoin (BTC) price upside had limited follow-up from the whales cohort.
Source: https://www.thecoinrepublic.com/2026/01/04/bitcoin-price-btc-whale-and-institutional-activity-boosts-confidence/
