Bitcoin Reclaims Six-Figure Status as Crypto Market Starts 2025 Strong
Bitcoin (BTC) surged back above the $100,000 mark on Monday, extending its early 2025 rally as U.S. markets kicked off the first full trading week of the year. BTC initially approached the key psychological level earlier in the session before breaking past it with a sharp 2.5% gain in an hour as U.S. markets opened. At the time of writing, Bitcoin was trading around $102,000, marking its highest point since December 19 and reflecting a 4.3% increase over the past 24 hours.
The CoinDesk 20 Index, a benchmark tracking the performance of 20 major cryptocurrencies, rose 3.5% during the same period. All major altcoins posted gains, with Ethereum (ETH) climbing 2.8% to $3,700 and Solana (SOL) rising 4.5% to surpass $220.
Market Recovery After Year-End Lull
The crypto market ended 2024 with a notable correction as investors locked in profits following Bitcoin’s strong rally tied to optimism surrounding Donald Trump’s election victory. Prices dipped amid reduced trading volumes during the holiday season and capital outflows from spot BTC and ETH exchange-traded funds (ETFs). BTC hit a local low near $91,000 on December 30, representing a 15% retreat from its record highs.
Institutional Interest and Spot Demand Drive Recovery
As traders returned after the holiday break, institutional demand appeared to reignite market momentum. MicroStrategy announced a fresh purchase of 1,020 BTC on Monday, while energy management firm KULR Technology Group doubled its Bitcoin holdings with a $21 million purchase.
Spot BTC ETFs recorded $908 million in net inflows on Friday, signaling renewed investor appetite. Meanwhile, BTC futures open interest remains significantly lower than mid-December levels on institutional platforms like CME, suggesting that the current price rebound is primarily driven by spot market activity rather than leveraged positions.
Funding rates across futures markets remain neutral, according to CoinGlass data, further supporting the view that the rally lacks speculative excess.
Macro Risks Remain
Despite the optimism, market watchers remain cautious about near-term volatility. Paul Howard, senior director at crypto trading firm Wincent, noted that institutional players had de-risked ahead of year-end but are now returning to the market with renewed confidence.
“We expect demand to pick up as 2025 progresses, but traders should remain cautious in the short term. While crossing $100,000 is significant, we anticipate price fluctuations in the coming weeks,” Howard said.
Crypto analytics firm 10x Research also predicted a market rebound in early January, driven by anticipation around President-elect Trump’s inauguration. However, the firm warned of potential selling pressure toward the end of the month as traders brace for the Federal Reserve’s upcoming policy meeting.
Hawkish signals from Fed Chair Jerome Powell during December’s meeting triggered a pullback in risk assets. Markus Thielen, founder of 10x Research, suggested that while inflation is expected to continue cooling, the Fed may take time to formally adjust its stance.
“The primary risk remains the Federal Reserve’s messaging. Any renewed inflation concerns could quickly dampen market enthusiasm,” Thielen said.
While optimism is fueling the current rally, market analysts advise caution, emphasizing that the start of the year may not replicate the bullish runs seen in early 2024 or late last year.
