Bitcoin breaks through $90,000, Ethereum stands above $3,000: is the bull run coming back?

The cryptocurrency market is witnessing a strong rebound, with Bitcoin breaking through the $90,000 mark, reaching a high of $90,460, narrowing the decline from the historical peak at the beginning of October to 28%; Ethereum is also rising, with its price returning above $3,000, reaching a high of $3,030. The recovery of these two leader assets is attributed to multiple factors: a broad rally in risk assets, increased expectations of Fed rate cuts, and the favorable technical outlook ahead of the Ethereum Fusaka upgrade. The sentiment in the derivatives market has significantly shifted, with a surge in demand for Bitcoin call options and continuous inflows into Ethereum spot ETFs for four days, reflecting the return of institutional funds and the restoration of market confidence. Although liquidity is thin during the Thanksgiving holiday, analysts believe this round of rise may mark the end of the prolonged dumping tide lasting several weeks.

Overall Recovery of the Crypto Market: Risk Assets Correlation and Macro Catalysts

The cryptocurrency market staged a spectacular duel on Wednesday, with Bitcoin and Ethereum both breaking through key psychological levels, leading the digital asset sector to a broad rise. Bitcoin saw a daily increase of 4%, reaching a high of $90,460, marking the first time in nearly a week that it stood above the $90,000 mark; Ethereum also showed strong performance, rising 3% to $3,030, successfully reclaiming the lost ground of $3,000. This synchronized rebound is not coincidental but closely linked to the recovery of global risk assets—major U.S. stock indices have performed strongly recently, with both the Nasdaq and S&P 500 recording significant gains, reflecting investors' optimistic expectations regarding a shift in Fed policy. On a deeper level, the slowdown in U.S. inflation data and weakening economic indicators have bolstered market bets on interest rate cuts in the first half of next year, creating a favorable environment for high-risk assets such as Bitcoin and Ethereum.

Liquidity conditions have thinned out ahead of the Thanksgiving holiday, which has amplified price volatility. Kaiko research analyst Adam McCarthy noted: “The rapid momentum of this rise is likely related to the holiday market environment. Essentially, the current low liquidity means that it takes less capital to drive price movements.” This characteristic provides opportunities for short-term traders but also increases market fragility. Looking back over the past month, Bitcoin has fallen over 36% from its historical high of $126,000 in early October, while Ethereum has dropped about 20% from its high of $3,800. However, this adjustment has cleared excessive leverage and laid the foundation for a healthy rise. Today, the volatility index remains moderate, contrasting sharply with the high volatility during the bear market of 2022, indicating that the market structure is maturing.

From the market sentiment perspective, investors seem to be testing the bottom area. Wintermute strategist Jasper De Maere analyzed, “Bitcoin has successfully resisted downward pressure over the past few weeks, forming a support area around the high of $80,000, which provides a solid foundation for price consolidation.” Similarly, Ethereum has found strong buying support near $2,900, indicating that the bulls are defending at a critical level. If Bitcoin can stabilize above $90,000, the next target will point to $95,000; if Ethereum can break through the $3,200 resistance, it may look up to $3,500. However, the lack of liquidity during the holidays may amplify volatility, and investors need to be cautious of short-term profit-taking risks.

Derivation Market Signals: A Dramatic Shift from Bearish to Bullish

The derivatives market is an excellent window to gauge sentiment, and recent data on Bitcoin and Ethereum options and perpetual contracts show that bearish sentiment is quickly turning bullish. According to statistics from Coinglass, the open interest in Bitcoin perpetual contracts—a key tool that allows traders to make leveraged bets—has rebounded after hitting a low, while the funding rate has turned positive. This means that long positions need to pay fees to short positions, indicating that bullish bets are regaining dominance. This shift occurred after a brief turn to negative funding rates earlier this week, reflecting a rapid recovery in market sentiment and suggesting that institutional investors may be re-establishing long positions.

The dynamics of the options market are more pronounced. On the mainstream derivation exchange Deribit, the open interest of Bitcoin call options with a strike price of $100,000 has surged, becoming one of the most active contracts; meanwhile, Ethereum call options with a strike price of $3,500 are also in high demand. This stands in stark contrast to last week when Bitcoin put options at $80,000 and $85,000 dominated, and Ethereum put options at $2,800 also attracted significant attention. This shift from downside protection to upside bets is often seen as a precursor to a recovery in market confidence. Spencer Hallarn, Global OTC Trading Director at GSR, stated: “In recent weeks, speculative long positions have significantly decreased, as evidenced by the decline in open interest in perpetual contracts and funding rates. This cleanup has set the stage for the rise of crypto assets.”

Key Data on Bitcoin and Ethereum Derivations

• Most Active Call Options: Bitcoin 100,000 USD, Ethereum 3,500 USD, open interest leads
• Previously Dominant Bearish Options: Bitcoin 80,000-85,000 USD, Ether 2,800 USD, providing downside protection
• Perpetual Contract Funding Rate: Both have turned positive, indicating a bullish bet is dominant.
• Open Interest Trend: Rebounding from the low point, indicating new capital entering the market.
• Implied Volatility Level: Remains moderate, reflecting a stabilization in market structure.

Historically, such shifts in the derivatives market often lead the trends in spot prices. At the beginning of 2023, when Bitcoin rebounded from its lows, a similar phenomenon occurred: a surge in demand for call options, followed by a significant price increase within a few months. Of course, the current market environment is different from that time—institutional participation is higher, and the regulatory framework is clearer, but the basic principle still applies: when investors are willing to pay a premium for upside risk, it usually indicates that they are confident about the mid-term outlook. For Ethereum, the approaching Fusaka upgrade further reinforces this optimism, as major technological upgrades often attract the attention of long-term investors.

Capital Flow Analysis: ETF Inflows and Institutional Confidence Recovery

The capital flow data provides another strong indication of market recovery. The movements of Bitcoin and Ethereum spot ETFs show that institutional funds are gradually returning to the market. According to Bloomberg Intelligence statistics, Bitcoin spot ETFs recorded a net inflow of about $130 million on Tuesday, marking the first consecutive two-day net inflow since early November; Ethereum spot ETFs performed even better, with a cumulative net inflow exceeding $60 million over four consecutive days. This capital return sharply contrasts with last month—November saw a total net outflow of $3.6 billion for Bitcoin ETFs, the most severe monthly outflow since the approval of ETFs in January, but the turning point may have arrived.

In terms of products, BlackRock's Bitcoin ETF (IBIT) and Ethereum ETF have shown outstanding performance, while Fidelity's products have shown differentiation. This rotation of funds indicates that investors are rebalancing within the crypto assets rather than completely withdrawing from the market. Looking at the broader ETF market, the XRP spot ETF recorded an inflow of $21.81 million, while the Solana spot ETF saw an outflow of $8.1 million, reflecting a selective positioning by investors in fundamentally strong projects. GSR's Hallarn added, “The clearing of speculative long positions has laid the foundation for the rise of crypto assets, and now the return of institutional funds confirms this trend.” His view is supported by on-chain data: the holdings of large holders (commonly known as 'whales') remained stable during price lows and even increased slightly, indicating that long-term investors see the pullback as an accumulation opportunity.

From a macro perspective, the inflow of funds into cryptocurrency ETFs is synchronized with the rebound in risk appetite in traditional markets. U.S. tech stocks have performed strongly recently, while bond yields have declined, creating a favorable environment for growth assets. More importantly, the sources of returns for Bitcoin and Ethereum are becoming increasingly diversified: Bitcoin, as “digital gold”, provides anti-inflation properties, while Ethereum offers additional returns through staking (annual yield of about 3%-5%) and the Layer2 ecosystem. For institutional investors, this diversified return structure increases its attractiveness, especially in a low-interest-rate environment. Although regulatory uncertainty still exists, the trend is developing in a positive direction.

Technical Analysis: Key Levels and Price Targets

Technical analysis provides additional clues for the short-term trends of Bitcoin and Ethereum. On the Bitcoin daily chart, the price successfully broke through the $90,000 resistance and turned the previous resistance into support. The MACD indicator formed a golden cross near the zero axis, which is a typical bullish signal indicating that momentum is strengthening. The RSI reading rose to 58, in a healthy range and not overbought, meaning there is still plenty of room for an increase. From the price structure, if Bitcoin can hold above $90,000, the next target will be $95,000 (Fibonacci 38.2% retracement level), and after breaking through, it may challenge the psychological barrier of $100,000.

The technical aspects of Ethereum are also encouraging. After breaking through the $3,000 mark, the MACD indicator formed a bullish golden cross, and the RSI rose to 64, showing strength but not overbought. The key resistance level is around $3,200, which is where the October high and the 200-day moving average intersect. If Ethereum can break through this level, it could open the way to $3,300 (Fibonacci 61.8% retracement level) and even $3,500. Supporting this bullish outlook is the analysis of trading volume: the rise of both assets is accompanied by a moderate increase in trading volume, confirming the validity of the breakout rather than a mere short covering.

Of course, risk management is indispensable. If Bitcoin fails to maintain the support at 90,000 USD, it may retrace to the 85,000 USD area; if Ethereum loses the 3,000 USD level, it could pull back to 2,900 USD or 2,700 USD. From the options market data, the open interest for Bitcoin put options with a strike price of 85,000 USD and Ethereum put options at 2,800 USD is concentrated, indicating that some investors are hedging against downside risk. Moreover, changes in the global macro environment could affect all risk assets, including Crypto Assets. Therefore, investors should set clear stop-loss levels and profit-taking points, especially in the context of unusual holiday liquidity.

Ethereum Fusaka Upgrade: Scalability Leap and Market Impact

The Fusaka upgrade of Ethereum (scheduled for execution on December 3) has become an important catalyst for this round of rise. This upgrade is widely regarded as a significant milestone in the development of Ethereum, with its core goal being to enhance the scalability and efficiency of the network. One of the most notable innovations is PeerDAS (Peer Data Availability Sampling), which theoretically increases data capacity by nearly 8 times by randomly assigning data availability responsibilities to groups of nodes. For ordinary users, this means that the release costs of Layer 2 rollups will be significantly reduced, transaction speeds will be faster, and Gas fees will be more predictable.

From a technical perspective, the Fusaka upgrade is a key component of the “The Surge” phase in the Ethereum roadmap. The introduction of PeerDAS not only addresses the data availability bottleneck but also lays the groundwork for future sharding. The development team estimates that after the upgrade, the transaction costs of mainstream Layer2 solutions such as Arbitrum and Optimism may decrease by 30%-50%, which will directly drive the adoption of application scenarios such as DeFi, gaming, and real-world assets (RWA). For example, the transaction fees for DeFi giants like Uniswap and Aave may drop to a few cents, while NFT minting and transfers will become more economical. This improvement not only benefits Ethereum itself but may also boost the token value of the entire Layer2 ecosystem.

Despite the optimistic upgrade prospects, the market reaction may be gradual. Historical experience shows that significant upgrades to Ethereum (such as Merge and Shanghai) often see a “buy the rumor” market before implementation, followed by “sell the news” pressure afterward. The current price trend partially reflects this cautious mentality, with traders seemingly waiting for clearer technical confirmation before committing fully to bullish positions. However, in the long term, the significance of the Fusaka upgrade goes beyond short-term price fluctuations: it marks another step in Ethereum's transformation from a “usable blockchain” to a “scalable global settlement layer,” which is crucial for the maturity of the entire Web3 ecosystem. Investors should pay attention to the network metrics post-upgrade, such as transaction throughput and fee changes, to assess the actual impact.

Industry Ecological Evolution and Long-term Prospects

The recovery of Bitcoin and Ethereum is not only about price but also reflects the evolution of the entire Crypto Assets ecosystem. On the Bitcoin side, Layer 2 solutions like Lightning Network and Rootstock are developing rapidly, with significant growth in transaction capacity and user numbers. These technological upgrades enhance Bitcoin's practicality, expanding it from a mere value storage to a payment and smart contract platform. For example, the number of nodes in the Lightning Network has doubled in the past year, with processing power exceeding 5,000 Bitcoin, which provides new possibilities for micropayments and cross-border transfers. At the same time, the institutionalization process of Bitcoin is accelerating: in addition to Spot ETFs, the richness of institutional-level custody services, futures products, and structured investment tools provides traditional financial players with more convenient participation channels.

The Ethereum ecosystem is also very active. The Fusaka upgrade is the latest chapter in its long evolutionary history, following key upgrades like the Merge (transition to proof of stake) and Shanghai (enabling withdrawals), each addressing specific bottlenecks and promoting ecosystem growth. Today, the total locked value (TVL) of the Ethereum Layer2 ecosystem has surpassed $20 billion, processing over 60% of the network's transactions. Fusaka may accelerate the adoption of these networks by lowering data publishing costs and spawning new applications. From an investment perspective, this creates indirect exposure: by holding ETH, investors are essentially investing in the entire Layer2 ecosystem, including leading projects like Arbitrum and Optimism.

From the perspective of industry competition, Bitcoin and Ethereum face both challenges and opportunities. Solana and others have advantages in throughput and fees, but Bitcoin and Ethereum lead in decentralized security and developer ecosystems. Public chains like Cardano and Avalanche are also innovating in specific areas, but Bitcoin's network effect and Ethereum's first-mover advantage are hard to shake. For investors, this diversified ecosystem provides rich opportunities, but risks must also be noted—altcoins typically have higher volatility and require strict position control. In the long term, the dual dominance of Bitcoin as a store of value and Ethereum as an application platform may continue, but the specific weights may be adjusted with technological advancements.

Market Outlook and Investment Strategy Considerations

Looking ahead, the prospects for Bitcoin and Ethereum depend on the interplay of multiple factors. On a macro level, the Fed's interest rate policy will be a key variable: if inflation continues to ease and the economy achieves a soft landing, expectations for rate cuts could drive risk assets to challenge previous highs; conversely, if the economy falls into recession, Crypto Assets may face a new wave of pressure. On the technical side, Bitcoin needs to hold the $90,000 support and break through the $95,000 resistance to confirm a new upward trend; Ethereum, on the other hand, needs to stabilize above $3,000 and conquer the $3,200 mark. Positive signals from the derivation market support an optimistic scenario, but investors should remain vigilant.

From an investment strategy perspective, the current market is suitable for building positions in batches and making dynamic adjustments. For short-term traders, attention can be paid to the breakthrough of key resistance levels, and options tools can be used to manage risks; for long-term investors, every deep pullback is an accumulation opportunity, as Bitcoin's long-term narrative (digital gold, anti-inflation tool) and Ethereum's ecological value (decentralized application platform) remain intact. In addition, investors may consider diversifying into other parts of the crypto assets ecosystem, such as selecting Layer2 tokens and infrastructure projects, to capture rotation opportunities. However, it should be noted that altcoins are more volatile, and position sizes need to be strictly controlled.

From a seasonal pattern perspective, December is typically favorable for Crypto Assets. Over the past five years, the average return of Bitcoin and Ethereum in December has exceeded 5%, with a higher probability of rising. This “December Effect” may be related to year-end portfolio rebalancing and institutional positioning for the next year. Combined with the fundamental catalyst of the Fusaka upgrade, Ethereum's performance for the remainder of this month is worth looking forward to; Bitcoin may benefit from the inflow of institutional funds and the narrative of the halving cycle. Ultimately, this rebound is not only a technical correction but also a reflection of market maturity—declining volatility, stable institutional holdings, and the rationalization of the derivation market all point to a healthier ecosystem. Although the road ahead is bound to have ups and downs, the evolution journey of Crypto Assets continues, and as the industry leaders, Bitcoin and Ethereum, every step they take is worth savoring and pondering.