Bitcoin Just Shocked Wall Street: The $90,000 Rebound No One Saw Coming

Bitcoin's (BTC-USD) move back above $90,000 is landing at a moment when investors are still processing a sharp leverage reset that erased nearly $1 billion in positions. After weeks of heavy selling pressure and a sentiment collapse, the original cryptocurrency rallied as much as 6.8% to $92,323, with Ether climbing more than 8% and smaller tokens such as Cardano, Solana, and Chainlink jumping over 10%. Traders pointed to a mix of renewed institutional signals and regulatory momentum, including comments from SEC Chairman Paul Atkins outlining plans for an innovation exemption and Vanguard's decision to open trading for ETFs and mutual funds that primarily hold crypto. Market analysts noted that washed-out positioning could be creating room for a more deliberate phase of risk-taking, even if the fundamental picture remains uneven.

The week's volatility intensified after Strategy Inc.'s chief executive suggested the firm could sell Bitcoin to meet debt payments, only for the company to later announce a $1.4 billion reserve to ensure liquidity is readily available. Market participants said the early reaction may have overstated the danger, with GSR's Spencer Hallarn arguing that conservatively addressing liquidity now could reduce the probability of more negative outcomes later. Still, Bitcoin's funding rate has turned negative, according to CryptoQuant, indicating stronger demand for bearish positioning in perpetual futures. Axis CEO Chris Kim described sentiment as cautious, with institutional investors possibly waiting for next week's Federal Reserve interest-rate decision before adding exposure.

Beneath the rebound, the market is still working through a nearly 30% decline from Bitcoin's early-October peak and the fallout from roughly $19 billion in leverage being wiped out. Tokens tied to US President Donald Trump's family have been among the hardest hit: American Bitcoin Corp. fell as much as 51% in under 30 minutes amid multiple volatility halts; the TRUMP memecoin has dropped from about $73.40 in January to roughly $6; WLFI is down about 30% from its September high; and MELANIA has slid to 13 cents after losing most of its value since January. Rising stablecoin balances suggest capital is moving to the sidelines rather than chasing the rebound, and CoinMarketCap's Fear and Greed Index has remained in extreme fear for three straight weeks. Investors may have dry powder building, but they are still waiting for clearer macro signals before stepping back into higher-risk positions.