Bitcoin’s (BTC) price has climbed back into six-digit territory, marking a significant milestone for the largest cryptocurrency as it extended its early 2025 recovery on Monday.
During the trading session, BTC advanced towards $100,000 and surged sharply above this key threshold, registering a 2.5% increase within an hour of the traditional U.S. markets opening. Currently, the cryptocurrency is trading at approximately $102,000, representing its strongest value since December 19 and a 4.3% uptick over the previous 24 hours.
In parallel, the broad-market benchmark CoinDesk 20 has experienced a 3.5% rise, with all twenty major cryptocurrencies showing positive returns. Ethereum’s ether (ETH) has increased by 2.8%, now priced at $3,700, while Solana’s SOL has seen a 4.5% rise, surpassing $220.
After experiencing a correction at the close of 2024, which saw Bitcoin pare some gains following the substantial rally post Donald Trump’s election win, investors began taking profits, leading to a decline in trading volumes. BTC reached a local bottom of approximately $91,000 on December 30, reflecting a nearly 15% retreat from its record highs.
Demand Returns as Leverage Remains Muted
As the first full business week of the new year commenced and traders returned from the holiday season, there were notable announcements regarding corporate BTC acquisitions. MicroStrategy revealed on Monday that it had purchased an additional 1,020 BTC, while Texas-based energy management firm KULR Technology Group added approximately $21 million worth of BTC to its treasury, effectively doubling its holdings.
Spot BTC ETFs experienced inflows totaling $908 million on Friday, indicating a resurgence in demand. Significantly, the open interest on BTC futures is markedly lower than it was in mid-December on the institutional-focused CME marketplace, suggesting that the recent price uptick has primarily been fueled by spot buying rather than leveraged positions. James Van Straten, senior analyst at CoinDesk, noted that funding rates are also at neutral levels, reflecting a lack of excess speculation during this rally.
Fed Risk
According to Paul Howard, senior director of crypto trading firm Wincent, “Just as we saw institutions window dressing their balance sheets mindful of risk assets for year-end and de-risking ahead of the holidays, we can expect a rebound in price action and demand, particularly as we progress into what we anticipate will be a positive year for the asset class and the upcoming U.S. administration.”
However, Howard cautions against becoming overly optimistic, stating, “My personal view is not to read too much into these levels [BTC over $100,000] as we can expect volatility to increase in the coming fortnight.”
Crypto analytics firm 10x Research projected a rebound in crypto prices for early January, coinciding with President-elect Trump’s inauguration but also warned of potential selling pressure at the end of the month prior to the Federal Reserve’s January meeting.
Recent hawkish comments from Fed Chair Jerome Powell during the December meeting initiated a pullback for risk assets, and 10x Research emphasized that the Fed may take time to adjust its stance even if inflation decreases in the upcoming months.
Markus Thielen, founder of 10x Research, stated, “The primary risk remains the Federal Reserve’s communication, especially if renewed concerns about inflation arise. While we anticipate lower inflation this year, it may take a while for the Federal Reserve to acknowledge and formally respond to this shift.”
Although some enthusiasm is expected as the new year begins, Thielen advises caution, emphasizing that this is not the time for the same level of bullishness witnessed during periods of late January to March 2024 or from late September to mid-December.
