The price of Bitcoin (BTC) is back in the six-figure zone as the largest cryptocurrency extended its early 2025 rebound on Monday.
BTC rallied as high as $100,000 earlier in the trading session, then broke sharply above the threshold, rising 2.5% in an hour as traditional US markets opened. It was recently trading around $102,000, its highest level since December 19 and up 4.3% in the last 24 hours.
Market benchmark CoinDesk 20 rose 3.5% over the same period, with all twenty crypto majors posting positive returns. Ethereum Ether (ETH) climbed 2.8% to $3,700, while Solana’s SOL rose 4.5% to over $220.
Bitcoin and the broader crypto market ended 2024 with a correction, paring some of the gains from the massive rally since Donald Trump’s election victory as investors took profits. Prices and trading volumes declined during the holiday lull, coupled with outflows from BTC and ETH spot exchange-traded funds. BTC hit a local low near $91,000 on December 30, a decline of almost 15% from its record highs.
Demand returns while leverage remains moderate
With the start of the first full business week of the year and traders returning to their desks after the holiday season, headlines about corporate purchases of BTC have continued. MicroStrategy announced the purchase of an additional 1,020 BTC on Monday, while Texas-based energy management company KULR Technology Group added $21 million worth of BTC to its treasury, doubling its holdings.
Spot BTC ETFs saw inflows of $908 million on Friday, a sign of returning demand. At the same time, open interest on BTC futures is significantly lower than in mid-December on the CME institutional market and on an overall basis, indicating that the recent price rebound was mainly due to purchases at the cash rather than leverage, noted James Van Straten. senior analyst at CoinDesk. Funding rates were also at neutral levels across the board, according to CoinGlass data, indicating a lack of froth during the rally.
Fed Risk
“Just as we have seen institutions pretending to be with their balance sheets mindful of risky assets for the end of the year and de-risking ahead of the holidays, the expectation is that price action and demand is recovering, particularly as we approach what we hope will be a positive year for the asset class and the next US administration,” Paul Howard, senior director at crypto trading firm Wincent, told Reuters. CoinDesk in a Telegram message.
“My personal view is not to read too much into these levels (BTC above $100,000) as we can expect increased volatility over the next fortnight,” Howard added.
Cryptocurrency analytics firm 10x Research also predicted in a Monday report a rebound in cryptocurrency prices in early January as President-elect Trump’s inauguration approaches, but warned of a sell-off massive end-of-month rally ahead of the Federal Reserve’s January meeting.
Fed Chairman Jerome Powell’s hawkish comments at the December meeting marked the start of a pullback in risk assets, and 10x Research noted that it will take time for the Fed to reverse its stance , even if inflation continued to calm down in the coming months.
“The main risk remains the Federal Reserve’s communication, especially if new concerns about inflation emerge,” said Markus Thielen, founder of 10x Research. “We expect inflation to decline this year, although it may be some time before the Federal Reserve officially recognizes and responds to this change.”
“Although some enthusiasm is expected at the start of the new year, this is not the time for the same level of optimism that we experienced from late January to March 2024 or from late September to mid-December,” a- he added.
