（Singapore, 03.12.2025）Bitcoin regained its footing on Tuesday, rebounding above the key US$90,000 level after a dramatic selloff earlier in the week stunned traders, erased nearly US$1 billion in leveraged bets and sent shockwaves through global markets. The sudden recovery offered some relief to investors who have been grappling with months of volatility, although caution continues to dominate trading floors as sentiment remains fragile.
The world’s largest cryptocurrency surged as much as 6.8% to US$92,323, reversing part of Monday’s steep losses. Ether also staged a strong comeback, climbing more than 8% to briefly trade above US$3,000. Other major altcoins, including Cardano, Solana and Chainlink, rallied more than 10% after several heavy sessions of selling. While the rebound restored some confidence, analysts stressed that the broader crypto landscape continues to show clear signs of stress.
The upward move came as traders reacted to a series of developments viewed as supportive for the sector. US Securities and Exchange Commission Chairman Paul Atkins signaled that regulators may soon introduce an “innovation exemption” aimed at giving digital asset firms more operational flexibility. The prospect of clearer regulatory guidance was welcomed by an industry that has long pushed for more predictable oversight.
Adding to the positive tone, Vanguard Group announced it would allow cryptocurrency-focused ETFs and mutual funds to be traded on its platform. The firm is known for its traditionally conservative approach, so investors interpreted the decision as a meaningful sign of growing institutional acceptance of crypto assets. Jasper De Maere, a strategist at Wintermute, said these shifts helped lift sentiment at a time when confidence had been steadily weakening. According to him, the rebound reflected both industry-specific optimism and a broader recovery in global markets.
The revival followed a turbulent start to the week, triggered by remarks from the chief executive of Strategy Inc., formerly MicroStrategy. Known for its massive Bitcoin holdings, the company suggested it might need to sell some of its cryptocurrency to meet debt obligations. The comments rattled investors who see Strategy as a major institutional anchor for Bitcoin demand. The firm later clarified that it had created a US$1.4 billion reserve to bolster liquidity and avoid forced selling, easing some of the market’s fears. Analysts said the move reduced the likelihood of an extreme downside scenario for the company and, by extension, the broader market.
Despite the rebound, several indicators suggest caution is still warranted. Data from CryptoQuant shows the Bitcoin funding rate turning negative, a sign that traders are leaning more heavily toward bearish futures positions. Chris Kim, CEO of quantitative trading platform Axis, noted that while prices have recovered, nerves among crypto-native traders remain. Many institutional investors are also holding back until next week’s US Federal Reserve interest rate decision, which is expected to influence risk appetite across markets.
Bitcoin has dropped nearly 30% since hitting a record high in early October, a decline intensified by the liquidation of about US$19 billion in leveraged positions. Analysts say the rapid unwinding of risky bets has left the market vulnerable to sudden swings.
Tokens associated with US President Donald Trump’s family were swept up in the volatility as well. Shares of American Bitcoin Corp., a mining company co-founded by Eric Trump, plunged more than half their value in under 30 minutes on Tuesday, forcing multiple trading halts due to extreme price movements. The president’s official memecoin, TRUMP, has also seen a steep collapse—from above US$73 earlier in the year to around US$6. WLFI, linked to the Trump-backed World Liberty Financial platform, is down roughly 30% from its September peak, while MELANIA, the First Lady’s memecoin, has fallen to about 13 cents after losing nearly all its early-year gains.
Further evidence of investor caution is visible in the rising balances of USDT and USDC on exchanges. Analysts at Bitfinex say traders appear to be parking funds in stablecoins rather than buying dips, a pattern common in late-stage corrections. The behaviour suggests investors are waiting for clarity on ETF flows and broader macroeconomic conditions before re-entering the market. CoinMarketCap’s Fear and Greed Index has remained at “extreme fear” for three straight weeks.
Crypto’s recovery unfolded in parallel with a return of stability across global financial markets. Asian equities traded higher on Wednesday, supported by a rebound on Wall Street after a brief but sharp selloff in global bonds and cryptocurrencies earlier in the week. Bitcoin’s rise back above US$90,000 helped steady sentiment, with Nasdaq and S&P 500 futures each inching up about 0.1%. The MSCI Asia-Pacific ex-Japan index rose 0.3%, while Japan’s Nikkei climbed 0.8%.
The earlier turbulence had been driven partly by growing expectations that Japan may soon raise interest rates, which triggered a global bond selloff and raised fears of leveraged carry trades unwinding. Kerry Craig of J.P. Morgan Asset Management said markets remain highly sensitive to movements in the yen and shifting interest-rate differentials between the US and Japan. Still, trading in Japanese government bonds stabilised on Wednesday, helping calm nerves.
With short-term volatility easing, investors are turning their attention back to the United States, where the Federal Reserve is widely expected to cut interest rates next week. Analysts say the prospect of a more dovish policy stance is supporting equities heading into December, historically a strong month for stock markets. Market watchers are also awaiting President Trump’s nomination for the next Federal Reserve chair, with White House adviser Kevin Hassett seen as the frontrunner. His dovish leanings have already weighed on the US dollar, helping the euro and British pound edge higher.
Oil prices steadied after recent declines as markets weighed fading hopes for a Russia-Ukraine peace breakthrough against supply concerns. Gold inched higher as well, rising 0.2% to around US$4,216 an ounce as investors continued to seek safe-haven hedges.
