Bitcoin reached a two-month high above $97,000 on Wednesday, leading a broader cryptocurrency rally fueled by positive economic data and advancing pro-crypto legislation. The surge liquidated nearly $700 million in short positions, rejuvenating market risk appetite. Analysts suggest the rally has potential to continue higher.
Bitcoin's price climbed 3.5% to about $96,755 on Wednesday, marking its highest level since November when it last exceeded $100,000, according to Forbes. The cryptocurrency has risen more than 8% since hitting a low of $90,383 on Saturday. Other assets followed suit: Ethereum gained 4.6% in Forbes' reporting or 6% to $3,371 per DL News, XRP rose 1.6% or 2.7% to $2.16, Solana increased 2.2%, and Dogecoin advanced 3.1%.
The rally added about $161 billion to the global crypto market's value, pushing it from $3.17 trillion to $3.3 trillion, as per CoinGecko data cited by Forbes. This comes after two months of flat trading following an October sell-off that erased roughly $1 trillion from the market's all-time high, DL News noted.
Key drivers include a mixed jobs report last week and lighter-than-expected inflation data on Tuesday, bolstering expectations for Federal Reserve interest rate cuts. Traders see 5% odds of a cut this month, rising to 26% in March and 34.7% in April, per CME's FedWatch tool. Lower rates historically boost crypto: Bitcoin soared from $5,000 in March 2020 to $69,000 by November 2021 amid rate reductions, but fell sharply in 2018 during hikes.
Legislative progress also contributed. The Senate Banking Committee plans markups this week on the Clarity Act, which aims to clarify regulation of digital assets between the SEC and CFTC. Last year, similar pushes under the Trump administration propelled Bitcoin above $120,000. Coinbase shares rose up to 4% on Tuesday and 0.6% on Wednesday.
Experts are optimistic. A market strategist told CoinDesk the rally "has legs," while Investopedia reported similar views. BitMEX co-founder Arthur Hayes predicted Bitcoin could hit $200,000 by March if the Fed injects liquidity via $40 billion in debt purchases, potentially fueled by U.S. access to Venezuelan oil keeping inflation low. Bitwise CIO Matt Hougan said prices could go "substantially higher" if markets avoid a flash crash, the Clarity Act passes, and stocks perform well—but warned of risks from large holders selling.
The breakout above $95,000 liquidated nearly $700 million in short positions, per CoinDesk, signaling renewed bullish momentum amid the U.S. government's $20 billion Bitcoin reserve as of August 2025.
