Bitcoin Rises Above $90,000 as January Outlook Improves, XRP Tracks Gains

Bitcoin climbed past the $90,000 mark on Monday, December 29, as cryptocurrency markets showed renewed momentum heading into year-end, with traders increasingly positioning for a potential recovery in January.

The world's largest digital asset rose as much as 3.1% to $90,200 during Asian trading hours before easing to around $89,615, according to Bloomberg data. Other major cryptocurrencies also advanced, with Ethereum gaining about 4% to move above $3,000, while XRP and Solana rose more than 3%.

The move followed a period of relative underperformance for Bitcoin, which largely missed Wall Street's pre-Christmas rally to record highs. Market sentiment had been dampened by an October selloff that triggered roughly $19 billion in leveraged liquidations, leaving traders cautious about rebuilding positions.

Analysts pointed to derivatives market activity as a key driver of the latest gains. “The move appears somewhat driven by short term retail traders taking on growing positions in futures,” said Sebastian Bea, chief investment officer at crypto treasury firm ReserveOne Inc. Bitcoin funding rates, which reflect the cost of holding long positions in perpetual futures, reached their highest level since mid-October, according to CryptoQuant data. However, Bea noted that overall futures open interest remains below the peaks seen during Bitcoin's October highs, when prices reached a record $126,251.

Joel Kruger, a crypto strategist at LMAX, said the relatively quiet market conditions could be masking underlying strength. “Bitcoin, in particular, has already repriced meaningfully higher this year and may now be absorbing supply as longer-term holders remain patient,” he said, adding that the market's ability to hold elevated levels suggests underlying demand remains intact.

Geopolitical developments may also be contributing to the rally. Rising oil prices, driven by renewed attacks between Russia and Ukraine, coincided with the move higher in digital assets. West Texas Intermediate crude rose about 1% to $57.24 per barrel, while Brent crude gained 0.8% to $60.81. The escalation added to existing global inflation pressures, potentially supporting demand for alternative assets.

From a technical perspective, Bitcoin remains in a consolidation range between roughly $86,000 and $92,000, with analysts noting that moving average signals continue to point to a broader downtrend. XRP shows a similar technical setup, with prices trading below key moving averages and facing resistance near recent highs, suggesting further downside risk despite the latest bounce.

Looking ahead, market participants are increasingly focused on January as liquidity returns after the holidays. Kruger said crypto's current calm “may prove temporary once liquidity returns and macro narratives reassert themselves in the new year,” potentially setting the stage for a more sustained move if risk appetite improves.

Asian equity markets were mostly subdued amid thin year-end trading, though South Korea's KOSPI index stood out with a 1.7% gain, led by chipmaker stocks.