2025-1-7 21:39 |
Bitcoin has surpassed $100,000 once again, reigniting a sense of bullishness in the cryptocurrency sector, which had dampened over the holiday season.
Cryptocurrency market capitalization rose in tandem with Bitcoin, surpassing $3.7 trillion after a 1% daily gain, returning to levels last seen in mid-December.
Market sentiment also improved noticeably as the Crypto Fear and Greed Index climbed to 76 from 72, entering the ‘extreme greed’ zone.
Why is Bitcoin going up?Bitcoin surged after MicroStrategy, the largest corporate holder of the benchmark crypto asset, announced plans to raise $2 billion via underwritten perpetual preferred stock offerings.
The goal behind this fundraiser is to strengthen its balance sheet and acquire more Bitcoin, with the offering expected to be completed in the first quarter of 2025.
Shortly after announcing the offering, founder Michael Saylor hinted at an imminent Bitcoin purchase, following through on January 6 with the acquisition of 1,070 BTC for approximately $101 million.
Alongside the US-based business intelligence firm, Japan’s Metaplanet made a similar move, with the firm’s CEO Simon Gerovich revealing the company’s intention to extend its Bitcoin holdings up to 5 times to 10,000 BTC in January.
Currently, the firm holds 1,762 BTC.
Among other catalysts, institutional demand also returned, with spot US-based exchange-traded funds raking in $908 million the previous trading day on January 3.
Bitcoin’s recent rally unfolded amid a sharp decline in retail demand.
According to CryptoQuant data, the rolling 30-day change in retail-sized transaction volumes—typically up to $10,000—plunged by 16% as BTC/USD retreated below the $100,000 mark, signaling a significant drop in retail investor participation.
Historically, when this variation drops below -10%, it signals a drop in retail interest.
This is typically a bullish sign as, according to experts, this means the current rally is primarily being driven by institutions, ETFs, and nation-states.
Another factor that plays out in favor of Bitcoin is that $100,000 serves as a key psychological resistance level, and pushing past it with strong momentum will be seen by many as a restart of the bull run, which in turn can push the rally even further.
With Bitcoin back above six figures, bullish projections have started to emerge.
According to analyst Rekt Capital, BTC is set to hit the $103k-$104k area in the short term.
This is based on the fact that every time the flagship crypto has rallied to $101k, the rally has extended to those levels.
However, he added that flipping the $101000 resistance to support is what bulls should be eyeing as it would confirm the trend strength and position Bitcoin for further gains.
Among other projections, fellow analyst The Cryptomist expects the current rally to extend to $106,000 in the short term.
When writing, Bitcoin was changing hands at $102,467, up 4.6% in the past 24 hours.
Currently the dominant force in the market, Bitcoin’s rally helped pull the altcoin market along with several of the top 99 cryptocurrencies, securing double-digit profits on the day with meme coins taking the lead.
The top performing altcoins were:
ai16zai16z (AI16Z) led the highest gains of the day among the top 100 largest crypto assets by market cap, with its price rallying 25%, bringing its market cap to over $2.48 billion at the time of writing.
Source: CoinMarketCap
Heightened trading activity contributed to the altcoin’s rally in price, as was seen by the 51% jump in its trading volume, which hovered over $463 million.
Earlier today, UAE-based crypto exchange Bybit announced that it would list AI16Z on the platform, leading to most of the gains seen today.
Further, the recent hype surrounding Agentic AI coins, driven by a large number of AI agents launched over the past month on the AI16Z platform, has contributed to the altcoin’s gains.
SPX6900SPX6900 (SPX) rose 21% over the past day, hitting an all-time high of $1.6, while its market cap was about to hit $1.5 billion when writing.
Source: CoinMarketCap
Its daily trading volume nearly tripled compared to the previous day, reaching approximately $119.5 million at the time of writing.
SPX rallied as derivatives traders were increasingly betting on the meme coin.
According to data from CoinGlass the open interest in its futures market surged by 86% to $49.26 million as observed on January 6.
Another factor that drew investor attention to the meme coin was its impressive performance over the past year.
In 2024, the token posted gains of over 20,000%, making it one of the best-performing cryptocurrencies.
This, coupled with the January effect, which is the period when traders return after the holiday season and trading activity picks up, has helped fuel the current rally.
InjectiveInjective (INJ) was up 14% over the previous day trading at $26.31 per coin bringing its weekly gains to over $33.4% at press time.
The altcoin’s market cap stood at over $2.5 billion as its trading volume was up 200% to over $341.8 million at press time.
Source: CoinMarketCap
The altcoin’s recent upswing after its community voted to transition to the next phase for the VC-funded L1 blockchain dubbed Injective 3.0, which will introduce new deflationary features expected to boost its deflation rate by 400%.
The project will do so by dynamically regulating the token supply according to the amount of staked INJ, allowing it to adapt in real-time to changes in staking activity.
The new tokenomics has strengthened optimism around the project’s long-term prospects drawing in fresh liquidity into the altcoin.
Injective’s price also rallied as its DeFi ecosystem has grown over the past months.
The total value locked in its DeFi ecosystem has climbed past $54.41 million, reaching its highest point since June 2024, per data from DeFiLlama.
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