TLDR
Bitcoin surpassed $102,000 on January 6, 2025, marking its first return to six-digit prices since December 19, with a 4.3% gain in 24 hours
The broader crypto market showed strength with the CoinDesk 20 index up 3.5%, including notable gains in Ethereum (2.8%) and Solana (4.5%)
Major institutional buying continued with MicroStrategy purchasing 1,020 BTC and KULR Technology Group doubling its Bitcoin treasury holdings
Spot BTC ETFs recorded $908 million in inflows on Friday, while futures open interest remains lower than mid-December levels
Analysts warn of potential volatility ahead of the Federal Reserve’s January meeting despite the current positive momentum
Bitcoin has made a strong start to 2025, pushing past the $100,000 mark on January 6 as institutional buyers returned to the market following the holiday season. The leading cryptocurrency reached $102,000, its highest level since December 19, marking a 4.3% increase over 24 hours.
The movement comes as traditional U.S. markets opened for the first full business week of the year, with Bitcoin showing particular strength in early trading hours. The cryptocurrency saw a sharp 2.5% surge in just one hour as Wall Street began its session.
The broader cryptocurrency market has also shown renewed vigor, 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 had fallen to around $91,000 on December 30, marking a nearly 15% decline from its peak following Donald Trump’s election victory.
Institutional interest has played a key role in the current rally. MicroStrategy, a prominent corporate Bitcoin holder, announced the purchase of an additional 1,020 BTC on Monday. In a parallel move, Texas-based KULR Technology Group doubled its Bitcoin holdings with a $21 million investment.
The spot Bitcoin ETF market has shown robust activity, with inflows reaching $908 million on Friday alone. This surge in spot market activity stands in contrast to the futures market, where open interest remains notably lower than mid-December levels on both the CME and across all exchanges.
James Van Straten, a senior analyst at CoinDesk, points out that the recent price increases appear to be driven primarily by spot buying rather than leveraged trading. This observation is supported by neutral funding rates across trading platforms, as shown by CoinGlass data, suggesting a more sustainable price movement.
Trading volumes had decreased during the holiday period, accompanied by outflows from spot Bitcoin and Ethereum ETFs. However, the market has shown clear signs of revival as traders return to their desks in the new year.
Paul Howard, senior director at crypto trading firm Wincent, shared insights via Telegram:
“Just as we saw institutions window dressing with their balance sheets mindful of risk assets for year-end and de-risking ahead of holidays, it’s expected we see price action and demand recouping especially as we head into what we expect will be a positive year for the asset class and upcoming U.S. administration.”
However, Howard advised caution regarding the current price levels, noting that increased volatility might emerge in the coming weeks.
Analysis from crypto research firm 10x Research suggests the crypto market could maintain its upward momentum through President-elect Trump’s inauguration. Yet, they also warn of potential selling pressure as the month closes, particularly in light of the upcoming Federal Reserve meeting.
The December Federal Reserve meeting, marked by hawkish comments from Chair Jerome Powell, previously triggered a pullback in risk assets. According to 10x Research, even with potentially lower inflation ahead, the Fed may take time to adjust its stance.
Markus Thielen, founder of 10x Research, emphasized that the Federal Reserve’s communication remains a key market risk, particularly if inflation concerns resurface. He noted that while lower inflation is anticipated 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 across both institutional platforms like CME and the broader market.
The latest data from CoinGlass indicates funding rates remain neutral across exchanges, suggesting the current rally lacks the excessive leverage that often characterizes unsustainable price movements.
