Bitcoin Reclaims $90,000 as Traders Bet on a New Year Rebound After Muted Holiday Rally
Bitcoin climbed back above the psychologically important $90,000 mark in early Asian trading on Monday, offering tentative signs of a rebound after the world’s largest cryptocurrency missed out on the traditional Santa Claus rally that lifted global equities to record highs.
The original cryptocurrency rose as much as 3.1 percent to trade above $90,200 in Singapore, according to data compiled by Bloomberg. The move came as broader risk appetite showed early signs of revival in the crypto market, even as investor positioning remains cautious following a sharp selloff earlier this quarter.
Other major digital assets also advanced alongside Bitcoin. Ether gained as much as 4 percent to move back above the $3,000 level, while several large-cap altcoins posted moderate gains, suggesting a broader, though still tentative, recovery across the digital asset space.
Crypto Lags Equity Rally, Then Finds Its Footing
Bitcoin’s rebound comes after a period of relative underperformance. While the S&P 500 surged to a record close in the run-up to Christmas, Bitcoin remained largely range-bound, highlighting a divergence between traditional risk assets and cryptocurrencies.
The wider crypto market has been struggling to recover from a weeks-long correction that began in October, triggered by the liquidation of nearly $19 billion worth of leveraged positions. That episode flushed out speculative excesses and left market participants more cautious about deploying fresh capital.
“Bitcoin was hollowed out by the leverage unwind, and traders have been reluctant to bet aggressively on a comeback,” market participants said. As a result, the year-end rally that many had hoped for failed to materialise for cryptocurrencies, even as stocks and other assets benefited from improving risk sentiment.
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Futures Activity Signals Shift in Near-Term Sentiment
The latest move above $90,000 appears to be driven largely by activity in the derivatives market rather than a surge in spot buying. Sebastian Bea, chief investment officer of crypto treasury firm ReserveOne Inc., said the uptick reflects growing interest from short-term traders.
“Monday’s move appears somewhat driven by short-term retail traders taking on growing positions in futures,” Bea said, pointing to rising activity in perpetual contracts.
One key indicator supporting this view is the Bitcoin funding rate, a measure of sentiment in the perpetual futures market. According to CryptoQuant data, the funding rate has climbed to its highest level since October 18, signalling increased demand for bullish positions and a willingness among traders to pay a premium to maintain long exposure.
Open interest in Bitcoin futures has also rebounded from recent lows, suggesting that traders are slowly rebuilding positions. However, analysts caution that positioning remains well below the peaks seen during Bitcoin’s run to record highs earlier this year.
Still Below October Highs, Caution Persists
Despite the recent bounce, Bitcoin remains some distance from its all-time high. The token touched a record level of $126,251 on October 6, driven by strong institutional inflows, optimism around regulatory clarity and expectations of a more crypto-friendly policy environment in the US.
Since then, the market has cooled considerably. Even with Monday’s rally, Bitcoin is down around 4 percent so far in 2025, underperforming many traditional asset classes. Analysts say this underscores the fragile nature of the current recovery.
“While open interest has picked up, it is still well below the levels that coincided with Bitcoin’s October highs,” Bea noted, suggesting that traders are re-entering the market gradually rather than with the conviction seen during previous bull phases.
Policy Wins and Institutional Adoption Offer Long-Term Support
In the background, longer-term structural factors remain supportive for Bitcoin and the broader crypto ecosystem. Institutional adoption has continued to expand, with more asset managers, corporates and financial institutions integrating digital assets into their portfolios and infrastructure.
In addition, a series of policy developments under US President Donald Trump, who has positioned himself as pro-crypto, have boosted longer-term confidence in the sector. Expectations of clearer regulations and a more accommodative stance toward digital assets have helped anchor sentiment, even during periods of price weakness.
However, analysts note that policy optimism alone may not be enough to drive sustained upside in the near term without stronger participation from long-term investors and clearer macro tailwinds.
What Investors Are Watching Next
Market participants say the sustainability of Bitcoin’s move above $90,000 will depend on whether spot demand begins to pick up and whether macro conditions remain supportive. Key factors to watch include:
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Futures positioning: Whether rising funding rates translate into sustained open interest growth or lead to another bout of leverage-driven volatility.
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Macro cues: Signals on US interest rates, inflation and risk appetite, which continue to influence flows into speculative assets.
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Institutional flows: Evidence of renewed allocations from long-term investors rather than short-term trading activity alone.
For now, the move above $90,000 has improved near-term sentiment, but analysts caution against reading too much into a single session’s gains.
“Early signs of a mood shift are emerging, but the market is still rebuilding confidence after the October selloff,” said one trader. “A durable rally will need broader participation and confirmation beyond futures-led moves.”
As 2025 draws to a close, Bitcoin’s latest rally has reignited hopes of a New Year rebound. Whether this marks the start of a more sustained recovery or another brief bounce will become clearer in the weeks ahead, as liquidity returns and investors reassess risk in the new year.
