Key Takeaways:
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• Bitcoin climbed back above $90,000 for the first time in a week, reducing its drawdown from October highs to ~28%.
• Lower volatility, improving ETF flows, and rising derivatives long positioning point to easing downside pressure.
• Traders increasingly expect Fed rate cuts, lifting risk assets including crypto alongside equities.
• Call option interest has shifted toward $100K strikes, suggesting market participants are testing upside potential.
What Happened?
Bitcoin rose as much as 4% to $90,460, marking its strongest rebound in roughly a week after a month-long selloff. The move aligned with a broader rally in risk assets as traders priced in renewed expectations for Federal Reserve rate cuts. Liquidity remained thin heading into Thanksgiving, yet volatility stayed unusually subdued — highlighting the impact of growing institutional presence in crypto markets. BlackRock’s U.S. Bitcoin ETF saw fresh inflows after a streak of redemptions, while Bitcoin ETFs collectively added ~$130M on Tuesday.
Why It Matters?
Bitcoin’s recovery, despite a previous 36% drawdown, signals potentially stabilizing sentiment and reduced forced selling. Derivatives positioning reinforces the shift: perpetual futures funding turned positive, open interest in bullish contracts is rising, and $100K call options now hold the most open interest — replacing recent downside hedging. Suppressed volatility suggests the asset’s risk profile may be gradually evolving as institutional adoption deepens. If sustained, this behavior could support more orderly price discovery through late 2025.
What’s Next?
With price consolidating in the high-$80Ks, traders are gauging whether the bottom of the selloff is in. Sustained ETF inflows, follow-through rate-cut expectations, and continued low volatility may open room for a stronger breakout toward $95K–$100K levels. Still, liquidity remains holiday-thin, meaning rapid moves in either direction are possible. The next catalysts: macro data affecting Fed timing and whether leveraged long positioning builds further without triggering another liquidation cycle.
