TLDR
- Bitcoin surpassed $102,000 on January 6, 2025, marking its first return to six-figure prices since December 19, up 4.3% in 24 hours
- The broader crypto market showed strength with the CoinDesk 20 Index up 3.5%, including notable gains by Ethereum (2.8%) and Solana (4.5%)
- Big institutional buying continued with MicroStrategi buying 1,020 BTC and KULR Technology Group doubling its investment in Bitcoin Vault
- Spot BTC ETFs saw inflows of $908 million on Friday, while futures open interest remains lower than mid-December levels
- Analysts are warning of potential volatility ahead of the Federal Reserve meeting in January despite the current positive momentum
Bitcoin started 2025 strong, breaking the $100,000 mark on January 6 as institutional buyers returned to the market after the holiday season. The leading cryptocurrency hit $102,000, its highest level since Dec. 19, up 4.3% in 24 hours.
The move comes as traditional US markets open for the first full business week of the year, with bitcoin showing particular strength in the early trading hours. The cryptocurrency saw a sharp jump of 2.5% in just one hour as Wall Street opened its session.
The broader cryptocurrency market also showed renewed strength, with the CoinDesk 20 index climbing 3.5%. Among the major alternative cryptocurrencies, Ethereum (ETH) rose 2.8% to reach $3,700, while Solana (SOL) posted even stronger gains of 4.5%, trading above $220.
This latest price action represents a recovery from the year-end correction that saw Bitcoin retreat from its all-time highs. The cryptocurrency fell to around $91,000 on December 30, a nearly 15% drop from its peak following Donald Trump’s election victory.
Institutional interest has played a key role in the current rally. MicroStrategi, a prominent corporate bitcoin holder, announced the purchase of an additional 1,020 BTC on Monday. In parallel, Texas-based KULR Technology Group doubled its Bitcoin funds with a $21 million investment.
The spot Bitcoin ETF market saw strong activity, with inflows of $908 million on Friday alone. This uptick in spot market activity contrasts with the futures market, where open interest remains significantly lower than mid-December levels on both the CME and all exchanges.
James Van Straten, senior analyst at CoinDesk, points out that recent price increases appear to have been driven primarily by spot buying rather than leveraged trading. This observation is supported by neutral funding rates on trading platforms, as shown by data from CoinGlass, suggesting a more sustainable price movement.
Trading volume was reduced during the holiday period, followed by an outflow from the spot Bitcoin and Ethereum ETFs. However, the market has shown clear signs of recovery as traders return to their desks in the new year.
Paul Howard, senior director of cryptocurrency trading firm Vincent, shared his insights via Telegram:
“Just as we’ve seen institutions deck out their balance sheets in anticipation of year-end risk assets and de-risking ahead of the holidays, we expect to see price action and demand recover, especially as we head into what we expect to be a positive year for the class.” assets and the incoming US administration.”
However, Howard advised caution on current price levels, noting that increased volatility could emerge in the coming weeks.
An analysis by crypto research firm 10k Research suggests that the cryptocurrency market could maintain its upward momentum through the inauguration of President-elect Trump. However, they also warn of potential selling pressure as the month closes, especially in light of the upcoming Federal Reserve meeting.
The Federal Reserve’s December meeting, marked by hawkish comments from Chairman Jerome Powell, had earlier triggered a retreat in risk assets. According to 10k Research, even with inflation potentially lower, the Fed may need time to adjust its stance.
Markus Thielen, founder of 10k Research, emphasized that the Federal Reserve’s communication remains a key market risk, especially if inflation is concerned about a resurgence. He noted that while lower inflation is expected this year, the Fed’s formal recognition and response to such changes could be gradual.
The crypto futures market shows relatively modest leverage compared to previous periods. Open interest in Bitcoin futures is currently lower than mid-December levels on both institutional platforms such as the CME and the broader market.
The latest data from CoinGlass shows that funding rates remain neutral across all exchanges, suggesting that the current rally lacks the excessive leverage that often characterizes unsustainable price movements.
