Bitcoin Rallies Above $93K Amid Short Squeezes

Crypto markets rebound as bitcoin clears $93,000

Bitcoin climbed decisively above the $93,000 mark in early December 2025, reversing a weeklong slide and driving broader strength across crypto assets and related equities. Ethereum also rallied, vaulting back toward recent highs after a notable uptick in buying activity.

The recovery was driven by a combination of forced short-covering, renewed demand into spot bitcoin exchange-traded funds (ETFs), and a macro backdrop that increasingly priced in U.S. monetary easing. Market participants saw heightened near-term volatility as leveraged positions were squeezed out at higher levels.

Market snapshot

Key price moves during the rebound included:

• Bitcoin: rallied above $93,000 after trading near $85,000 earlier in the week.
• Ethereum: rose roughly 5% in 24 hours, trading near $3,100 and approaching November peaks.
• Crypto equities: major exchange and infrastructure stocks recorded notable gains amid the rally.

Short-liquidation wave amplified the bounce

One of the acute technical drivers behind the price spike was a cluster of short-liquidations. Over a recent 24-hour window, approximately $406 million of short positions were liquidated, with bitcoin shorts accounting for an estimated $237.5 million and ethereum shorts representing about $97.5 million.

Traders and desks reported that concentrated stops above $93,000 triggered a cascade of forced buybacks, amplifying the intraday move and increasing volatility. These dynamics can produce sharp price overshoots in either direction as leverage is rapidly removed from the market.

Why short squeezes matter

• Short squeezes accelerate price moves and can trigger momentum-driven flows.
• They temporarily reduce market liquidity as market makers and liquidity providers adjust exposures.
• Short-covering often attracts fresh buyers who interpret squeezes as breakout confirmations.

Spot bitcoin ETF flows support the rally

Retail and institutional purchases into spot bitcoin ETFs also bolstered the rebound. On the most recent trading day, the suite of spot ETFs recorded roughly $58.5 million of net inflows, marking a fifth consecutive day of positive flows and totaling about $288.2 million for the period.

These inflows contrasted with significant outflows in November 2025, when the product family saw approximately $3.48 billion in redemptions. The reversal in December highlights how large-scale investor sentiment can change rapidly as macro expectations and on-chain dynamics shift.

Macro backdrop: Fed expectations and risk appetite

Monetary policy expectations played an important role. Markets increasingly priced in a high probability that the Federal Reserve would announce a 25-basis-point rate cut at the early-December meeting, influencing risk asset allocation and reinforcing demand for yield-sensitive and speculative assets.

As of the most recent data, the market-implied odds for a 25-basis-point cut had risen substantially week over week, which helped reduce the opportunity cost of holding non-yielding assets like bitcoin and supported risk-seeking positioning across crypto-related instruments.

Crypto-linked equities advance

Equity names tied to crypto infrastructure and services also rallied alongside spot crypto prices. Notable moves included:

• Major cryptocurrency exchange stocks increased after the rebound, reflecting renewed volumes and investor appetite.
• Trading platform and brokerage names saw share-price gains as ETF inflows and spot market activity signaled stronger client demand.
• Companies holding large bitcoin treasuries or providing continued exposure to the asset also recorded positive reactions.

Investors cited renewed retail and institutional activity as a key catalyst for the equity moves. Portfolio managers frequently repositioned exposure to capture upside as spot and derivatives markets turned more constructive.

Miner update: American Bitcoin swings after lockup expiry

Among bitcoin miners, one publicly listed miner experienced increased volatility after the expiry of an insider lockup, which allowed early private-placement shareholders to trade their holdings. The stock had plunged sharply following the lockup expiration before recovering a portion of its losses.

Company leadership publicly addressed the situation, confirming that private-placement shares were unlocked and that early investors had the option to sell. Senior management emphasized ongoing commitment to the business and stated that they were retaining their own holdings.

Per recent regulatory filings, a named insider holds more than 68 million shares—representing a mid-single-digit percentage of the company’s outstanding stock. The disclosure clarified ownership but also underscored the potential for concentration-related volatility in smaller-cap mining equities.

Implications for the mining sector

• Lockup expirations can create abrupt share-pressure events irrespective of on-chain fundamentals.
• Miners remain exposed to both bitcoin price moves and company-specific governance, financing, and operational updates.
• Institutional and retail miners with large shareholder bases may see amplified swings when concentrated positions become tradable.

What the December 2025 setup means for traders and investors

The current phase—characterized by ETF inflows, short squeezes, and a dovish shift in Fed expectations—creates both opportunity and risk for market participants.

Key considerations for market participants in late 2025 include:

• Volatility management: elevated short-liquidation risk suggests traders should monitor leverage and use prudent position sizing.
• Flow sensitivity: ETF and institutional flows can cause persistent price trends; tracking inflows provides insight into potential momentum.
• Regulatory developments: evolving guidance around digital-asset custody and market structure will continue to shape institutional adoption.
• Company-specific catalysts: earnings, lockup expirations, and corporate announcements can generate outsized moves in smaller cap crypto equities.

Outlook for 2025 and beyond

Looking across 2025, several structural themes are likely to influence crypto prices and market behavior:

• Institutional adoption: continued development of regulated products and custody services may broaden investor participation in digital assets.
• Macro policy: central-bank paths and real rates will remain primary drivers of risk-asset allocation decisions.
• Market structure: liquidity deepening in spot, derivatives and ETF channels should gradually reduce execution friction but may also concentrate flows during stress events.
• On-chain fundamentals: network activity, supply dynamics and developer progress on key protocols will inform medium-term valuations.

For bitcoin specifically, 2025 has been a year of shifting sentiment—bridging the post-halving supply reality with ongoing inflows from regulated products. Investors should expect intermittent bouts of volatility even as institutional frameworks mature.

Risk management and practical tips

Given the present environment, market participants may consider the following practical approaches:

• Maintain conservative leverage and establish clear stop-loss levels to guard against liquidation cascades.
• Monitor ETF flow reports and large-block trades for early signs of positioning shifts.
• Diversify exposure across spot holdings, regulated products, and high-quality on-chain projects to balance idiosyncratic risk.
• Keep abreast of corporate filings for miners and service providers, especially around lockup expirations and insider transactions.

Conclusion

The December 2025 rebound in crypto markets illustrates how interplay between technical flows, product-based demand and macro expectations can rapidly change market direction. While spot ETF inflows and easier-rate expectations provided a backdrop for the rally, concentrated short-covering and company-specific events—such as miner lockup expirations—added volatility.

As the market moves forward, participants should weigh the potential for continued institutional adoption against the persistence of episodic liquidity events. Prudent risk management, attention to flow data and careful selection across equity and spot exposures will remain central to navigating the evolving crypto landscape.

Disclaimer: This post is a compilation of publicly available information.
MEXC does not verify or guarantee the accuracy of third-party content.
Readers should conduct their own research before making any investment or participation decisions.