Bitcoin prices were seen strengthening and breaking above US$90,000 after rebounding from sharp selling pressure, even though crypto market sentiment remains fragile amid cautious investor behavior. According to Bloomberg data on Wednesday (3/12/2025), bitcoin briefly surged as much as 6.7% to US$92.228. Ethereum (ether) also rebounded more than 8%, climbing back above US$3,000.

Meanwhile, several smaller and less liquid cryptocurrencies such as Cardano and Chainlink jumped more than 10%. Market participants observed that positive sentiment has started to re-emerge after weeks of weakened investor demand. This improvement was supported by statements from Securities and Exchange Commission (SEC) Chair Paul Atkins regarding plans to disclose exemption policies for digital asset firms, as well as Vanguard Group’s decision to allow ETF and mutual fund trading that predominantly contains crypto assets on its investment platform. “This strong price movement is being driven by a combination of industry-specific positive sentiment and crypto’s adjustment to broader market gains,” said Wintermute Desk Strategist Jasper De Maere.

Earlier, crypto markets were hit on Monday (1/12/2025) following comments from the CEO of Strategy Inc., a major bitcoin accumulator, who noted that the company might sell bitcoin if necessary to meet debt repayment obligations. Strategy later announced the creation of a US$1.4 billion cash reserve to safeguard liquidity. Spencer Hallarn, Head of OTC Trading at Global GSR, argued that the move actually reflects positive risk management. “Although initially met with negative sentiment, the conservative step to secure liquidity now actually reduces the potential for extreme risks ahead,” he said.

Nevertheless, several indicators suggest the recovery remains fragile. Data from CryptoQuant showed that bitcoin’s funding rate—a key sentiment indicator in the crypto market—has turned negative in recent days. This indicates growing interest in bearish positions in perpetual futures markets over bullish bets. “Overall sentiment remains very cautious. Crypto traders appear uneasy,” said Axis CEO Chris Kim. He added that institutional investors prefer to wait for next week’s Federal Reserve interest rate decision before increasing risk exposure.

Bitcoin remains down nearly 30% from its all-time high in early October, leaving the digital asset market in a vulnerable position following prolonged selling pressure that also wiped out roughly US$19 billion in leveraged positions.
Several cryptocurrencies linked to the family of U.S. President Donald Trump were also affected. Shares of American Bitcoin Corp., a crypto mining company co-founded by Eric Trump, plunged as much as 51% in under 30 minutes on Tuesday, although trading was halted several times due to extreme volatility. The TRUMP token, Donald Trump’s official memecoin, collapsed from its record US$73.40 at launch in January and is now trading around US$6, according to CoinGecko. Meanwhile, the WLFI token from Trump-associated DeFi platform World Liberty Financial is down around 30% from its September peak. The MELANIA memecoin, owned by First Lady Melania Trump, is now priced at US$0.13 and has lost almost all of its value since peaking in January.

According to the Bitfinex analyst team, investor caution is also reflected in the rising balances of stablecoins such as USDT and USDC on crypto exchanges, indicating that market participants prefer to hold funds rather than aggressively buy dips. In their report, Bitfinex analysts noted that this pattern is typical during late-cycle correction phases. Investors shift to stablecoins while waiting for ETF inflows to stabilize and macroeconomic uncertainty to ease. “Importantly, this is not a pattern seen at long-term market tops where stablecoin liquidity shrinks. At present, liquidity is actually accumulating on the sidelines as ‘dry powder’ awaiting clearer direction,” they explained.

Reflecting this caution, the CoinMarketCap Fear and Greed Index on Tuesday (2/12/2025) remained in the extreme fear zone, where it has held for nearly three consecutive weeks.