On the eve of Thanksgiving, the Bitcoin market showed a strong rebound trend, with a single-day increase of 4%, pushing the price back above the $90,000 mark for the first time in nearly a week. This movement has attracted widespread market attention, especially as the holiday approaches and liquidity tends to thin out, making significant price fluctuations a focal point of discussion among investors. As an asset with a market capitalization in the trillions of dollars, Bitcoin’s inherent high volatility was once again evident in this price movement.
A significant driver of this price increase was large-scale short covering. Data shows that over the past 24 hours, short liquidations were five times higher than long liquidations, indicating that short sellers are actively closing their positions. The structure of the derivatives market has also changed noticeably: the funding rate for perpetual futures turned from negative to positive, reflecting that bullish bets have regained dominance; the open interest for call options with a strike price of $100,000 jumped to the top position, replacing the previous put options at $80,000 to $85,000, showing a shift in market sentiment from defensive to optimistic. Spencer Hallaran, Head of OTC Trading at GSR, pointed out that the significant reduction in speculative long positions has created conditions for the market to rise.
On the macro level, market expectations that the Federal Reserve may restart interest rate cuts have enhanced the investment appeal of risk assets, and the correlation between Bitcoin and high-growth stocks like the Nasdaq has once again become prominent. In terms of capital flows, products such as the BlackRock Bitcoin ETF ended a streak of continuous redemptions, recording approximately $130 million in inflows in a single day, providing crucial support for the market. Although the overall outflow for November reached $3.6 billion, the worst monthly performance since the ETF’s launch, the recent reversal in inflows is seen as an important signal of recovering market sentiment.
The market environment before the Thanksgiving holiday is characterized by thin liquidity. Adam McCarthy, a research analyst at Kaiko, explained, “Lower liquidity during holidays means the amount of capital required to drive market changes is significantly reduced.” This characteristic amplifies the magnitude of price fluctuations. At the same time, implied volatility has remained relatively stable, indicating that the institutionalization of the market is changing the risk transmission mechanism. Jasper de Maer, a trading strategist at Wintermute, added that the mid-to-high $80,000 range has formed an effective support level, providing a technical basis for the reversal of the bearish trend.
Since retreating from the historical high of $126,000 in early October, Bitcoin experienced a maximum decline of 36% and has now recovered to within 28%. Although external factors such as Trump’s tariff policies once triggered the evaporation of over a trillion dollars in market value and a wave of forced liquidations, the current improvements in market structure, alleviation of short pressure, and deepening institutional participation have created conditions for price recovery. Investors are closely watching the sustainability of prices above $90,000 and whether higher resistance levels can be effectively tested.
