Written by: Alvis
At the beginning of 2025, Bitcoin returned to 100,000 USD, with the market seemingly gradually warming up after a period of fluctuations. On the evening of January 6, BTC broke through the 100,000 USD barrier and stabilized around 102,000 USD at the time of writing, with a 24-hour increase of about 4%. Not only Bitcoin but major cryptocurrencies like Ethereum and Solana also saw widespread increases. Behind the market recovery, multiple factors are jointly driving prices upward.
Market sentiment warms, with significant increases in the activity of futures and options.
Perpetual futures funding rates rise, with healthy derivatives indicators.
According to Coinglass data, the weighted funding rate for open contracts of Bitcoin perpetual futures on major exchanges recently rose to 0.0113%, indicating that market sentiment is turning optimistic. QCP Capital pointed out that the current funding levels are still within a healthy range, and although large-scale short squeezes cannot be expected, the likelihood of short-term market pullbacks is low.
Additionally, crypto trader Gordon Grant observed that the Bitcoin options market became active again at the beginning of January. Call options expiring on January 7, with a strike price of 103,000 USD, exceeded 1,000 contracts in trading volume. This active trading of short-term call options often signals potential upside in prices.
Coinbase premium returns, institutional and retail sentiment warms.
After experiencing a severe sell-off in December, Coinbase's Bitcoin premium returned to neutral levels on January 4. CryptoQuant analyst IT Tech believes this indicates a gradual warming of retail sentiment in the U.S. market. However, on-chain data analysis shows that the trading volume of small retail investors below $10,000 continues to decline, and the main driving force in the market currently still comes from institutional investors and mid-to-large traders.
Institutional accumulation accelerates, while Bitcoin's supply and demand continue to tighten.
According to SoSoValue data, since the beginning of January, Bitcoin ETF spot has achieved net inflows again, with total assets under management reaching 111.46 billion USD. The ETF net asset ratio (market value compared to total Bitcoin market value) stands at 5.72%, with a historical cumulative net inflow of 35.91 billion USD.
The strong inflow of institutional funds is an important driving force behind the recent recovery in Bitcoin prices. MicroStrategy increased its BTC holdings again, purchasing 1,070 BTC for 101 million USD on January 6, bringing its total holdings to 447,470 BTC, valued at over 44 billion USD. Meanwhile, Bitcoin mining company MARA Digital also announced it would continue to increase its BTC holdings, with its positions nearing 44,000 BTC.
Other global institutions are also taking action:
Japanese company Metaplanet plans to expand its holdings to 10,000 BTC.
El Salvador added 5 BTC, increasing its total holdings to 6,009 BTC.
U.S. listed company KULR added 213 BTC, surpassing a total holding of 430 BTC.
The continuous inflow of these funds further tightens the market's circulating supply, providing a foundation for Bitcoin's medium-term rise.
The recovery of altcoins and the rise of the AI ecosystem.
Trump-themed Memecoin rises rapidly.
Trump was officially confirmed for re-election as U.S. President on January 7, leading to a new round of increases in related cryptocurrencies. The TRUMP token rose over 80% in the past three days, while MAGA and TRUMPCOIN saw increases nearing 100%. Although these increases are speculative in nature, the Trump administration's crypto-friendly stance brings broader positive expectations to the market.
AI concept coins continue to strengthen.
At CES 2025, artificial intelligence once again became the focus of the tech field, with AI concept cryptocurrencies also strengthening. WLD, RENDER, and IOTA achieved increases of 10%, 8%, and 6% respectively. AI16Z saw a short-term increase of over 25%, and AIXBT's price broke through 0.55 USDT again. The market shows high interest in the long-term potential of the combination of crypto technology and artificial intelligence.
Analyst outlook: Optimism and concerns regarding Bitcoin's market.
Despite the overall optimistic market, various parties hold differing views on Bitcoin's future trajectory:
Optimists: Analysts from Bitfinex and Bernstein believe that the tight supply and demand for Bitcoin, along with reduced selling pressure from miners, will drive prices up in the medium term, with a price target of 160,000 to 200,000 USD by 2025.
Cautious: Both Arthur Hayes and QCP Capital believe there may not be excessive increases in the short term, and the market may see a correction around mid-March, suggesting investors reduce their positions in the late first quarter.
