Bitcoin (BTC) has remained above the $110,000 mark for the second consecutive day, showing strength amid cautious market sentiment. While BTC rose modestly by just over 1% in the past 24 hours, decentralized finance (DeFi) tokens such as Uniswap (UNI) and Aave (AAVE) stole the spotlight, with UNI jumping 24% and AAVE climbing 13%. The rally was largely fueled by positive remarks from U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins, who appeared optimistic about the future of DeFi.
The overall crypto market followed suit, with the CoinDesk 20 index—which tracks major cryptocurrencies excluding stablecoins and exchange tokens—posting a 3.3% gain. Ether (ETH), Solana (SOL), and Chainlink (LINK) also recorded solid growth in the 5–7% range, contributing to the upbeat momentum.
Despite the positive price action, many traders continue to approach the market cautiously. According to research from K33’s Vetle Lunde, funding rates—a measure of market sentiment and leverage—remain unusually low. In fact, the average annualized funding rate across platforms sits at just 1.3%, a level typically associated with local market bottoms rather than tops.
This defensive stance is also reflected in trading data from Binance, where negative funding rates were seen on several days last week. These conditions indicate that traders are not yet confident in the sustainability of Bitcoin’s latest rally.
“Bitcoin doesn’t usually peak when funding rates are this low,” said Lunde. “This could suggest that the market has more room to grow, especially if traders begin to shift away from caution.”
Further evidence of market hesitation can be seen in the flow of funds into leveraged Bitcoin exchange-traded funds (ETFs). The ProShares 2x Bitcoin ETF (BITX), a leveraged ETF that aims to double the daily return of Bitcoin, currently holds exposure to about 52,435 BTC. That’s significantly lower than its December 2023 high of 76,755 BTC.
This decline in ETF inflows suggests that institutional and retail investors alike are still unsure about the longevity of Bitcoin’s bullish move, despite the price hovering near previous all-time highs.
Meanwhile, DeFi tokens are experiencing a strong resurgence. Uniswap (UNI) led the charge with a remarkable 24% gain, followed by Aave (AAVE) at 13%. These gains came shortly after SEC Chair Paul Atkins made favorable comments regarding the DeFi sector, suggesting regulators may take a more constructive approach going forward.
These comments appear to have breathed new life into the DeFi market, which had been under pressure from regulatory scrutiny in recent months. Investors are now reassessing the potential of DeFi platforms as regulatory clarity improves.
While the crypto market saw a strong day, traditional markets tied to the crypto sector were less impressive. Crypto-related stocks traded mostly flat, with Semler Scientific (SMLR) being the exception. The company, which has adopted a Bitcoin accumulation strategy similar to MicroStrategy’s, saw its stock price fall by 10%.
SMLR’s market valuation has now dipped below the total value of the Bitcoin it holds, a sign that investors may be questioning the sustainability of this approach.
Despite Bitcoin’s current strength, not all analysts are convinced that the rally will continue. Kirill Kretov, a senior analyst at CoinPanel, remains skeptical. He believes the current price movement is part of a typical volatility cycle, which could soon be followed by a sharp correction triggered by external news or a shift in sentiment.
“This feels more like another bounce in a choppy market,” Kretov said. “We may soon see selling pressure return, testing key support levels at $105,000 and $100,000.”
As the crypto market awaits its next move, investors and traders are watching closely to see whether Bitcoin can build a solid foundation above $110,000. A sustained rally could confirm the start of a new bullish phase, while a retreat could reaffirm cautious sentiment.
Either way, altcoins are playing an increasingly important role in shaping market dynamics. With regulatory signals now seeming more favorable—especially for DeFi—investors may start looking beyond Bitcoin for opportunities.
A finance graduate, Maheen Hernandez has been drawn to cryptocurrencies ever since Bitcoin first emerged in 2009. Nearly a decade later, Maheen is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies. Appreciate the work? Send a tip to: 0x75395Ea9a42d2742E8d0C798068DeF3590C5Faa5
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