Bitcoin Explodes to $93K After Venezuela Crisis: Bank of America Just Opened the Floodgates

# Bitcoin Explodes to $93K After Venezuela Crisis: Bank of America Just Opened the Floodgates

Monday, January 5, 2026

Sometimes you can feel when the market's mood shifts. The charts say one thing, but the underlying current tells a different story. This morning, Bitcoin briefly touched $93,000—its highest level in four weeks—and for the first time in months, it actually feels like the market might have a pulse again.

But the real story isn't the price. It's what's happening behind the scenes: $645.8 million in ETF inflows on the first trading day of 2026, the Fear & Greed Index flipping to neutral for the first time since October, and—perhaps most significantly—**Bank of America greenlighting crypto allocations** for wealth management clients starting today.

Yeah, today. January 5th. The same day Bitcoin decided to wake up.

Let's dig into what's actually happening here, because if you're just watching the price chart, you're missing half the story.

## The Numbers: Not Just Another Green Day

Current Market Snapshot (as of Monday morning):

- Bitcoin: $92,943 (briefly hit $93K, up ~3% over 7 days)

- Ethereum: $3,170 (holding above critical $3K level, up ~7% weekly)

- XRP: $2.13 (up nearly 10% on the week, flipped BNB to become 4th largest crypto)

- Total market cap: Back above $3 trillion

- Fear & Greed Index: 40 (Neutral) - first time since October

- 24-hour liquidations: $260 million, with shorts taking the brunt ($200M)

But here's the kicker—while retail traders were still doom-scrolling Twitter, institutions were quietly loading up.

## The $645 Million Elephant in the Room

On January 2nd—the first trading day of 2026—something remarkable happened. After bleeding over $6 billion in combined outflows during November and December, Bitcoin and Ethereum ETFs suddenly reversed course. Hard.

The breakdown:

- Bitcoin ETFs: $471.3 million in net inflows (largest single day in 35 trading sessions)

- Ethereum ETFs: $174.5 million (best day in 15 trading sessions since Dec 9)

- Combined total: $645.8 million

To put that in perspective, the last time Bitcoin ETFs saw inflows this strong was November 11th, when they pulled in $524 million in a single day. That was before the late-year rout that had everyone questioning whether institutions were done with crypto.

Turns out, they weren't done. They were just... rebalancing.

Who led the charge?

- BlackRock's IBIT: Dominated Bitcoin inflows with $287 million

- Grayscale's ETHE: Led the Ethereum side

Here's the thing that makes this interesting: these inflows came despite prices still being down ~1.5% over the previous 30 days. This wasn't FOMO buying on a rally. This was strategic accumulation while prices were still compressed.

As Wal, CMO of Tonso, put it bluntly on X: "Lots of institutional investors sold their $BTC in Q4 '25 to tax loss harvest. Now they are loading up, this is just the beginning."

## Bank of America Just Made It Official

While the ETF inflows were impressive, what happened today might be even more significant for the long game.

Starting January 5, 2026 (literally today), Bank of America is allowing its 15,000+ wealth management advisors to recommend Bitcoin allocations to clients for the first time. Not just "allow clients to buy it if they ask"—but actively recommend it as part of a diversified portfolio.

The Details:

- Allocation range: 1% to 4% of portfolio

- Platforms: Merrill Lynch, Bank of America Private Bank, Merrill Edge

- Approved products: Four spot Bitcoin ETFs starting today

- BlackRock's IBIT

- Fidelity's FBTC

- Bitwise's BITB

- Grayscale's Bitcoin Mini Trust (BTC)

Why this matters:

Bank of America has $2.67 trillion in assets under management. Even a conservative 1% allocation across just a fraction of that client base represents billions in potential capital that wasn't available last week.

Chris Hyzy, Chief Investment Officer at Bank of America Private Bank, framed it carefully: "For investors with a strong interest in thematic innovation and comfort with elevated volatility, a modest allocation of 1% to 4% in digital assets could be appropriate."

That's banker-speak for: "Bitcoin's legit now, but let's not get crazy."

The bigger picture:

This puts Bank of America in line with its Wall Street peers:

- BlackRock: Recommended 1-2% Bitcoin allocation in early 2025

- Fidelity: Suggested 2-5% (up to 7.5% for investors under 30)

- Morgan Stanley: Endorsed 2-4% for "opportunistic portfolios"

- Vanguard: Just reversed course last week, now allowing crypto ETFs

Notice a pattern? The institutional dominoes are falling, one by one. The holdouts—Wells Fargo, Goldman Sachs, UBS—are starting to look increasingly isolated.

## What Changed? The Narrative Shift

So what's driving this sudden reversal? A few things, actually:

### 1. Tax-Loss Harvesting is Over

The theory making the rounds (and backed by on-chain data) is that institutions dumped positions in Q4 2025 to lock in losses for tax purposes. Classic end-of-year portfolio management. Now that 2026 has started, those same firms are buying back in—often at lower prices than they sold.

That's not speculation. That's systematic rebalancing, and it's exactly what sophisticated investors do.

### 2. The October Liquidation Event is Behind Us

Remember October 10, 2025? The day $19 billion in leveraged positions got wiped out? That event shook confidence hard. Since then, markets have been consolidating, deleveraging, and generally just... healing.

The fact that we're seeing coordinated inflows again suggests the trauma is wearing off. Markets are stabilizing.

### 3. Regulatory Clarity is Coming

This week, U.S. lawmakers are expected to advance crypto market structure legislation. Real regulatory frameworks—not just enforcement actions or vague guidance—could unlock the next wave of institutional capital that's been sitting on the sidelines waiting for clarity.

### 4. The Technical Setup Improved

Bitcoin spent weeks consolidating between $85K-$93K. That's classic base-building behavior. When it finally broke above $90K with volume and held, it triggered stop-losses on shorts (hence the $200M+ in short liquidations) and confirmed a higher-low structure.

Ethereum breaking cleanly above $3,000 didn't hurt either.

## The Memecoins Are Back (Sort Of)

While Bitcoin led the charge, the real fireworks were happening in the memecoin sector.

Dogecoin: Up 17% on the week, leading all major tokens

PEPE: Rocketing as much as 25% as the memecoin index heats up

The CoinGecko GMCI Meme Index now shows a market value of $33.8 billion with $5.9 billion in daily trading volume. That's not tiny.

Does this mean we're entering another meme cycle? Hard to say. But historically, when retail attention starts flowing back into high-risk speculative plays, it's a sign that broader risk appetite is returning.

## Liquidation Cascade: Shorts Get Squeezed

Let's talk about what actually caused Bitcoin to briefly spike to $93K this morning.

24-hour liquidation data:

- Total liquidations: $260 million

- Short liquidations: $200 million

- Long liquidations: $60 million

In the past four hours alone, $121 million in short positions got liquidated versus just $9 million in longs.

Translation: A lot of traders were betting on downside. When Bitcoin broke above key resistance, those positions got force-closed, creating a cascade of buying pressure that pushed prices even higher. Classic short squeeze.

On Hyperliquid (the leading decentralized perp platform), shorts accounted for 54.4% of all liquidated positions versus 45.6% longs. The bears got caught leaning the wrong way.

## Technical Picture: Breakout or Bull Trap?

From a technical standpoint, here's what's interesting:

Bitcoin:

- Confirmed breakout from month-long triangle consolidation

- Reclaimed $90K with volume (critical psychological level)

- Support holding at $88,500-$89,000

- Resistance: $94K-$98K zone (if it breaks here, next stop is $100K+)

Ethereum:

- Clean break above $3,000

- Building higher lows on short-term timeframes

- Not showing relative weakness vs. Bitcoin (bullish sign)

- Target if momentum continues: $3,500

XRP:

- Flipped BNB to become 4th largest crypto by market cap

- Strong institutional interest (whales loaded $3.6B recently)

- Trading above $2, extending early January outperformance

Key Technical Note:

Bitcoin dominance continues to mirror its 2019 pattern. No clear break above the 21-week moving average yet. If history rhymes, dominance may spike briefly before altcoins catch a bid. We're in a Bitcoin-dominant phase (Altcoin Season Index at 25), but that could shift if ETH continues showing strength.

## What Could Derail This?

Let's be real—nothing's guaranteed. Here are the risks:

1. Macro Shocks

If global markets stumble (recession fears, geopolitical crisis, etc.), crypto sells off with everything else. We saw this in late 2025.

2. ETF Flows Reverse

If institutions go from "accumulation" to "distribution," flows could turn negative fast. One strong week doesn't make a trend.

3. Regulatory Setback

If the expected crypto legislation gets delayed or watered down, some of the current optimism could evaporate.

4. Token Unlocks & Overhead Supply

Hyperliquid faces a $30 million HYPE token unlock on January 6th. Large unlocks often create selling pressure.

5. Volatility Event

We're still in a market where $260M gets liquidated in 24 hours. Leverage is back, and when leverage is back, violent moves—in either direction—are always possible.

## The Contrarian Read: Why This Might Be Different

Here's the thing that makes this moment interesting: the setup doesn't feel like the usual retail-driven FOMO rally.

Indicators that suggest this could have legs:

1. Institutions leading, not following - ETF inflows came before the price rally

2. Sentiment still cautious - Fear & Greed Index at 40 (neutral), not euphoric

3. Onchain metrics improving - Long-term holders stopped selling, realized losses declining

4. Regulatory clarity incoming - Not just talk, actual legislation expected this week

5. Corporate accumulation continuing - MicroStrategy (Strategy) still buying, Tether sitting on 96K+ BTC

6. No retail exhaustion yet - Google Trends and social volume still relatively low

If this is the start of a new institutional-led phase, it might be slower and more boring than past crypto rallies—but also more sustainable. Instead of parabolic moves that end in crashes, we could see steady accumulation that grinds higher over months.

That's not as sexy as "Bitcoin to $200K by March," but it's probably healthier for long-term adoption.

## Bottom Line: Watch What They Do, Not What They Say

The biggest takeaway from today isn't Bitcoin briefly touching $93K. It's the convergence of multiple signals:

$645M ETF inflows on first trading day

Bank of America endorsing 1-4% allocations starting today

Fear & Greed flipping neutral after months of extreme fear

Technical breakout confirmed with volume

Short squeeze liquidating $200M in bearish bets

XRP, DOGE, memecoins showing life (risk appetite returning)

This is starting to look less like a dead-cat bounce and more like an actual shift in market structure.

Will it last? That depends on whether:

- ETF flows stay positive through January

- Regulatory legislation actually passes

- Bitcoin can hold above $90K and push through $94K-$98K resistance

- Ethereum continues its relative strength

But for the first time since October, there's a credible case that the worst might be over. Not because charts say so, but because the smart money is moving—and it's moving in.

As one analyst put it: "ETF outflows and liquidations were weighing on sentiment, but the structure does not resemble panic. This appears to be a market in equilibrium, as weak hands exit and stronger balance sheets absorb supply."

Translation: Retail sold. Institutions bought. And now we wait to see who was right.

Monday morning feels different. Let's see if Tuesday agrees.

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## References

1. CoinDesk - "Bitcoin price: hits $93,000, ether tops $3,000 as Venezuela president Maduro in U.S. custody" (January 5, 2026)

2. AMBCrypto - "'January effect' hits as Bitcoin and Ethereum ETFs see $645mln inflows" (January 4, 2026)

3. BeInCrypto - "Crypto News Events Threatening Your Portfolio This Week" (January 5, 2026)

4. FinanceFeeds - "Bitcoin and Ether ETFs Start 2026 With $646M Inflows Despite Market Fear" (January 4, 2026)

5. The Block - "ETF inflows return as crypto enters 2026, but market is 'still wrestling with internal fatigue': analysts" (January 5, 2026)

6. Bankless Times - "Bank of America Advises Crypto Allocation: Up to 4% in Bitcoin & Digital Assets" (January 5, 2026)

7. Yahoo Finance - "Bank of America says its wealth management clients may put up to 4% of their portfolio in crypto" (December 2, 2025)

8. CoinPedia - "Crypto Market Starts 2026 Strong: Bitcoin and Ethereum Above $90K and $3K; XRP Flips BNB" (January 3, 2026)

9. CryptoNews.com - "[LIVE] Crypto News Today: Latest Updates for Jan. 05, 2026" (January 5, 2026)

10. CoinDesk - "Bitcoin tops $91,000 with ether, dogecoin higher amid U.S. action on Venezuela" (January 4, 2026)

11. HOKANEWS - "Bank of America Quietly Opens Bitcoin Access — Wealth Clients Get Green Light" (January 3, 2026)