Bitcoin price reclaimed the $100,000 (€96,300) mark on Monday, triggered by a sharp retreat in the US dollar. However, the rally may not be sustained due to a relatively low trading volume and the lack of a fresh catalyst.
Bitcoin experienced a notable resurgence on Monday, rising 4% to surpass the $100,000 threshold for the first time since 19 December.
The cryptocurrency market saw more than $900m (€867m) in spot Bitcoin exchange-traded fund (ETF) inflows on the same day, signalling renewed investor interest. Despite this, the sustainability of the rally remains uncertain, as institutional buying volumes were relatively low, according to data from Coinbase. By early Tuesday in the Asian session, Bitcoin had retreated slightly, trading at $101,670 (€97,900) as of 4:30 am CET.
Bitcoin’s resurgence aligns with US dollar weakness
Bitcoin’s surge coincided with a significant decline in the US dollar, which retreated sharply on Monday following a Washington Post’s report that Trump will soften his tariff stance. The news initially caused the US dollar index to drop as much as over 1%, the biggest intraday decline since 2023, before cutting some losses.
This decline buoyed other assets, including global stock markets and Bitcoin. The euro also posted its largest single-day gain against the dollar in 14 months.
However, the US President-elect denied such a report on his Truth Social, which “incorrectly states that my tariff policy will be pared back”, he said. The dollar pared some of its early gains and is expected to continue the uptrend ahead of Trump’s inauguration later this month. A strengthening dollar may continue to exert pressure on Bitcoin and other currencies, with Bitcoin likely awaiting a fresh catalyst for its next major move.
Year-end decline amid profit-taking and Fed policy
Bitcoin peaked at more than $108,000 (€104,000) on 17 December, following a hawkish interest rate cut by the Federal Reserve. The Fed’s Dot Plot projections indicated two 25 basis point cuts in 2025, a shift from the earlier forecast of a full-percentage point reduction.
By the end of 2024, Bitcoin had dropped approximately 16%, closing the year at just over $91,000 (€86,700). Profit-taking and subdued trading volumes during the holiday season contributed to the decline. Coinbase data revealed that Bitcoin trading volumes have been trending downward since the US election. Even with Monday’s price rally, trading activity remained below the levels observed during the Fed’s rate decision in December, suggesting waning optimism in the so-called Trump rally.
However, many analysts believe the world’s largest cryptocurrency will extend its rally in 2025. “Bitcoin’s and crypto’s performance in 2024, if there was still any doubt, solidifies that it deserves a place within a diversified investment portfolio”, said Josh Gibert, a market analyst at eToro Australia last week.
Investors eye a new surge after Trump’s inauguration
Option markets saw mounting interest in the betting price above the $100,000 mark, with the $120,000 (€115,600) call with an expiry date of 28 March as the most popular option on Deribit. This may suggest that traders expect that the Trump Administration will impose pro-cryptocurrency regulations and push Bitcoin’s price to a new high.
The President-elect’s inauguration is scheduled for 20 January, and markets are anticipating moves to relax cryptocurrency regulations and advance his pledge to make the United States “the crypto capital of the planet”. In December, Trump reiterated his plan to include Bitcoin as part of the US strategic reserves.
