Bitcoin returns to $100,000, markets recover slightly

On the evening of January 6, 2025, Bitcoin surpassed the $100,000 mark for the first time since December 19, 2024, reaching $102,137 with a 4% gain within 24 hours.

At the same time, ETH also rose above $3,700, while Solana crossed the $220 threshold, reflecting the strong recovery of the crypto market.

This rise in prices is thought by analysts to be related to the increase funding rate of perpetual futures contracts, signs that optimism is returning.

According to data from Coinglass, the average funding rate of the Bitcoin perpetual futures contract has increased by 0.0113% in the last 8-hour cycle.

Analysts at QCP Capital noted that the derivatives market is showing signs of increased euphoria. In the latest report, they note that when Bitcoin first crossed the $100,000 mark on Dec. 5, the funding rate skyrocketed.

However, funding rates remain healthy this time, which makes them not anticipating a short-term upward squeeze. The report also suggested that Trump-related factors may not yet be a major driver for the crypto market until after the January 20 inauguration.

In particular, the low volatility in the short term and the current balanced option structure suggest that the market is still cautious and there is no clear trend in the short term.

Gordon Grant, a crypto derivatives trader, appreciated the importance of Bitcoin breaking through the $100,000 mark this time. He noted that the market is seeing abnormal cash flow into short call orders related to the week of January 10.

More than 1,000 call orders at $103,000 were traded over the weekend, which he said could yield significant alpha for investors.

Grant also compared the event to strong price rises in previous years, such as early 2023 when short-term call orders led Bitcoin to rise from $20,000 to more than $25,000.

Grant also recalled the January 2024 event, when Bitcoin rose from $40,000 to $48,000 ahead of iBit's launch. According to him, there are certain similarities in market activity this time, especially as Trump's inauguration is seen as a short-term influence factor.

At the same time, the futures structure of options suggests a higher price for the days following the inauguration, which may reflect expectations on major events or gamma-driven trading strategies.

The amount of liquidation of crypto short positions has skyrocketed over the past 24 hours, totaling more than $175 million. Of these, more than $108 million went to short positions, and Bitcoin accounted for more than $36 million of these.

This raises the question of whether this is the start of a long-term rally in 2025 or just short-term excitement, when markets are betting on big events like Trump's inauguration.

However, according to Grant, the current futures structure suggests traders are expecting a longer-term uptrend rather than a brief bounce in the first week of the new year.