Enneking claimed that digital asset treasuries (DATs) played a key role in this recent resurgence, stating that “I think the most important aspect of the market just driving through this correction was bitcoin (and other tokens, especially ETH) treasury companies.”

“After being patient and watching the markets drop, the pause above $80k for BTC triggered the conclusion for those companies that it was time to get back in,” he claimed.

“The explanation is purely psychological, as was the drop. Unlike prior retracements, however, this is the first rapid retracement we’ve seen since institutions became major players, particularly with respect to BTC.”

When explaining what drove these latest gains, analysts highlighted several factors. Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital, stated that “These gains were fueled by a mix of short-covering, renewed ETF inflows, and bargain-hunting after the sharp drop toward $80k.”

“Traders saw that level as oversold relative to fundamentals, so once selling pressure eased, dip-buyers stepped in and forced shorts to unwind,” seemingly depicting the recent runup as a natural bounceback.

Julio Moreno, head of research for CryptoQuant, offered a similar take, stating that “it seems to be a relief rally after the heavy selling of the prior weeks.”

“For example, short term holders that sold realized large losses, as shown in the short-term holder SOPR, which declined to 0.93 on November 22, the lowest so far this year,” he said via Telegram. “This means that short-term holders realized a 7% loss on average.”

The chart below illustrates these developments:

FOMC Rate Cut Expectations

Multiple analysts focused on expectations that Federal Open Market Committee will cut the benchmark rate at their upcoming policy meeting and how that is impacting risk assets, including cryptocurrencies like bitcoin.

The projected odds that Federal Reserve policymakers will implement such a rate cut in December increased to more than 80% today, according to CME FedWatch data.

Greg Magadini, director of derivatives for digital asset data provider Amberdata, commented on this development, emphasizing that it coincided with the broad gains that the markets experienced today.

Magadini – “Last week, the odds were 50/50 (see CME FedWatch Tool),” he noted via email.

“Combine this with low volume holiday week trading, and we have an easy path higher into an EOY rally as the markets are bouncing from severe lows.”