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Bitcoin Rally Sees $600 Million in Bearish Crypto Bets Wiped Out - BLOOMBERG
by Ryan Weeks, Suvashree Ghosh and Sidhartha Shukla
(Bloomberg) -- Bitcoin advanced to a two-month high, finally joining the rally in risk assets and precious metals after spending weeks stuck in a tight range.
The original digital asset rose as much as 2.4% to $96,348 early Wednesday, its highest intra-day level since Nov. 16., before giving up some gains. Ether, the second-largest token, surged as much as 5.1%. In options markets, the rally has erased more than half a billion dollars in bearish crypto bets.
Bitcoin slumped to a loss of more than 6% for 2025 after ending the year in muted fashion, trading in a narrow range and proving largely indifferent to rallies in stocks and precious metals. But the token has flashed signs of a potential breakout throughout January, and traders now see it potentially gaining ground on rival asset classes.
“Medium term, I think we could see investors allocate more to Bitcoin on a gold-catch-up narrative — and other risk-on assets are having a great time,” said Justin d’Anethan, head of research at Arctic Digital.
He pointed to a Tuesday report showing that underlying US inflation rose less than expected as a tailwind for the token, as well as tensions surrounding the US Federal Reserve, which was served with grand jury subpoenas from the Justice Department earlier this week. The Fed episode highlights “the value of safe-haven and hard assets” over the US dollar, d’Anethan said.
Another factor is the “sharp short squeeze” in Bitcoin derivatives markets, said Vincent Liu, chief investment officer at Kronos Research. Some $290 million of Bitcoin short positions have been liquidated in the past 24 hours, according to CoinGlass data. Across all cryptocurrencies, about $600 million of short positions were wiped out.
Investors poured $754 million into the 12 US-listed Bitcoin exchange-traded funds on Tuesday, the most since Oct. 7, in a vote of confidence that the rally has further to go.
A sustained break above $95,000 would open the way for a run at the $100,000 mark and “potentially the 200-day moving average, which currently stands at $106,115,” Tony Sycamore, analyst at IG Australia, said in a note.
Broadly, traders view the current macro backdrop as positive for Bitcoin, said Joshua Lim, global co-head of markets at FalconX.
Venezuela tensions, unrest in Iran, the Fed independence debate and MSCI’s decision to shelve a plan to eject crypto-heavy firms like Strategy Inc. from major indexes amount to a “steady drumbeat of positive macro developments” for Bitcoin, he added.Ad
Bitcoin was trading around $95,000 as of 10:20 a.m. in London.
(Updates prices.)
