Bitcoin is ending closer to the $100,000 mark once again, after reaching its highest price since late February, as investor sentiment picks up across financial markets. The cryptocurrency had experienced significant downward pressure recently, with its value dropping as much as 30% from a peak of nearly $109,000 on January 20.
The downturn was largely attributed to Trump’s tariff policies, which sent shockwaves through both the stock market and the digital asset space.
However, Bitcoin has rallied, climbing as much as 3.1% to $97,483, marking its highest level since February 21. The digital asset last hit $100,000 on February 7. Smaller cryptocurrencies, including Dogecoin and Ether, also saw strong gains, with Dogecoin rising 4.8% and Ether up 3.3%.
Expectant investors attribute the market rebound to surging activities in spot trading that counterbalanced declining demand for derivative assets intended for leveraging purposes. Traders now prioritize momentum-based trading techniques instead of the macroeconomic elements, inflation, and tariffs, which used to govern Bitcoin price activity back during the first part of this year.
Non-traditional bitcoin and ether-based exchange-traded funds (ETFs) received more than $3.2 billion from investors in the previous week. IBIT, the iShares Bitcoin Trust ETF, received $1.5 billion in inflows, which became its biggest influx during this year.
The market demand for options has risen dramatically as investors hold the most options contracts with a $100,000 strike price. The steady market persists despite ongoing volatility because the liquidation levels of both long-term and short-term crypto positions show minimal movement.
The market now prefers momentum-based trading because of spot demand, according to Chris Newhouse, who serves as director of research at DeFi trading firm Ergonia. Bitcoin manifests two different macroeconomic patterns by which it behaves similarly to gold, yet alternatively exhibits characteristics like equities. The price of Bitcoin is increasingly influenced by short-term market momentum, which stems from spot market demand.
The market faced difficulties right after Trump announced his tariffs in the previous month because investors displayed risk-averse behavior, which triggered large-scale liquidations of crypto futures. However, the current trend points to renewed confidence in the digital asset space.
Also Read: Bitcoin ETFs Amass $1B Inflow in 4 Days As BTC Builds Momentum
