Bitcoin has surged above the coveted $95,000 threshold, trading at $95,190, marking a remarkable 4.65% increase in just 24 hours. Analysts have attributed this upward momentum to robust spot buying activities, suggesting a wave of investor confidence.
In stark contrast to futures contracts, spot buying entails the purchase of actual Bitcoin. This approach is generally perceived as more sustainable, suggesting that this rally could maintain its strength. As crypto analyst Will Clemente pointed out, the current surge seems primarily driven by spot purchases, catching many traders by surprise.
The market has observed a significant liquidation of short positions, totaling $269.21 million, indicating traders betting against Bitcoin were unprepared for this sudden upswing. MN Trading Capital analyst Michaël van de Poppe expressed optimism, predicting that Bitcoin could potentially reach $100,000 within the week. The last time Bitcoin rose above this significant psychological level was on November 13.
Prediction markets, particularly on platforms like Polymarket, indicate a 51% likelihood of Bitcoin achieving the $100,000 milestone by February 1, alongside a 23% probability it could even hit $105,000 in that timeframe.
February’s Historical Strength
Historically, January has yielded modest gains for Bitcoin, averaging around 4.18% since 2013. However, February promises more robust performance, with an average return of 13.12% for the same period.
As Bitcoin nears $100,000, retail investor sentiment could shift dramatically, particularly as fear of missing out (FOMO) might ignite a buying frenzy among retail participants. A current reading of 26 on the Crypto Fear & Greed Index categorizes the market sentiment as one of ‘fear,’ oscillating between fear and extreme fear since early November after a significant market sell-off.
U.S. Demand Lags Despite Price Gains
Despite Bitcoin’s impressive rally, the Coinbase Premium Index remains negative, suggesting that U.S. investors are selling more Bitcoin than they are purchasing when compared to global exchanges like Binance. This indicates a persistent selling pressure from U.S. investors, potentially pointing to capital outflows from the region.
Singapore-based exchange Phemex has noted that such a negative premium can signify ongoing selling pressure. Traditionally, U.S. demand has been a substantial driver behind major Bitcoin rallies, especially following the re-election of President Trump in November 2024.
Some analysts speculate that U.S. investors may be holding back, awaiting clearer regulatory guidelines. The Senate has postponed the markup of the Clarity Act until late January to build bipartisan support. This act seeks to delineate clearer rules for cryptocurrency regulation. If enacted, many analysts believe it could fuel another surge in Bitcoin prices.
As the market watches to see if Bitcoin can reclaim the $100,000 mark, all eyes will be on the evolving dynamics between demand, regulatory clarity, and investor sentiment in the coming days.
