A number of elements drove the sentiment up. The stability of the Bitcoin price has reduced volatility, thereby restoring traders’ confidence in short-term positions. Additionally, derivatives reflected better liquidity. Funding rates returned to normal levels, which, in turn, reduced forced liquidations, allowing traders to focus on their strategies.
Long-term Bitcoin holders also reduced selling activity. On-chain data showed stronger holding behavior, a pattern that often aligns with steadier price action.
The last time Bitcoin traded above $97,000 was November 14. At that point, the sentiment index still showed extreme fear as prices fell from record highs.