Market Rally and Derivatives Shift
Bitcoin broke through $97,000 on Wednesday, reaching its highest level in eight weeks as derivatives markets shifted to risk-on positioning. The largest cryptocurrency posted gains exceeding 4.4% over 24 hours while the broader crypto market capitalization climbed to approximately $3.4 trillion.
Major cryptocurrencies joined the rally, with Ethereum, Solana, and $BNB recording substantial gains. The move ended weeks of range-bound trading and triggered over $680 million in short position liquidations during the past day, according to CoinGlass data. Traders betting against Bitcoin were caught offside as prices reclaimed levels that had capped rallies since November.
Speculative Sentiment and ETF Inflows
Polymarket bettors now assign greater than 60% odds that Bitcoin will reach $100,000 before January ends. Speculative sentiment has turned sharply positive as spot prices continue to advance. The breakout forced heavy deleveraging across derivatives markets.
U.S. spot Bitcoin ETFs recorded roughly $750 million in net inflows on Tuesday, marking their largest single-day intake in nearly three months. Nexo Dispatch analyst Iliya Kalchev noted that flows of this scale tend to influence market structure gradually by absorbing supply rather than driving immediate upside. The allocation follows year-end rebalancing by institutional investors.
Macroeconomic Environment and Geopolitical Factors
QCP Capital analysts described the current not-too-hot, not-too-cold macroeconomic environment as "Goldilocks," citing resilient U.S. labor data and stable inflation as risk appetite returned across equities, precious metals, and crypto. Geopolitical tensions involving Venezuela and Iran have not derailed markets, while oil absorbed a geopolitical premium without triggering broader risk aversion.
Bitcoin-Related Equities and Haven Assets
Bitcoin-related equities posted strong gains during U.S. trading hours. Strategy added more than 8%, while KindlyMD advanced 10%. Metaplanet, the largest Asian Bitcoin company, gained 15% in Tokyo trading. Strive added 7% after Semler Scientific shareholders approved the company's acquisition.
A criminal investigation into Federal Reserve Chair Jerome Powell, initiated on Friday, has pushed investors toward haven assets, including gold, silver, and Bitcoin. Trade Nation senior market analyst David Morrison stated that concerns over Federal Reserve independence and growing U.S. involvement internationally are driving the shift. Technology stocks have lagged, with the Invesco QQQ Trust down more than 1% while Bitcoin gained around 10% year-to-date.
Gold trades near $4,600 per ounce and silver above $91, with analysts viewing $5,000 and $100 as achievable respective targets. The U.S. Supreme Court declined to rule on President Donald Trump's tariffs on Wednesday, removing a source of near-term market uncertainty.