Over the last nine days, bitcoin (BTC) has experienced a sharp dip below $90,000 and a strong recovery above $108,500. Analysts at the crypto exchange Bitfinex attributed the rebound in price to spot demand picking up, especially among crypto exchanges based in the United States.

According to the newest edition of the Bitfinex Alpha report, bitcoin’s recovery reflected relative strength compared to the stock market. The digital asset rallied 10% by the end of last week, with a peak-to-trough move of more than 18%.

Bitcoin Spot Demand Recovers

On January 13, BTC fell to $89,300, triggering roughly $818 million in both short and long liquidations. However, as U.S. President Donald Trump’s inauguration approached, bitcoin’s value increased alongside spot and institutional demand.

During the recovery, the market saw aggressive taker buy pressure. This was evident in a sharp uptick in the Spot Cumulative Volume Delta (CVD), which tracks the difference between market buy and sell orders over a given period. An aggressive rise in the CVD signals that buying pressure is dominant in the spot market, buyers are actively lifting ask prices, and there is strong demand and potential upward momentum for BTC.

“The noticeable aggression from spot market buyers as traditional markets were about to close reinforces this view, with strong demand from both short-term holders and institutional investors. This consistent buying from the U.S. has been key to BTC maintaining its position as among the best performing risk assets since the U.S. election results were announced in early November,” Bitfinex said.

The Catch

While the spot demand recovery has been positive for BTC, Bitfinex analysts noted that it has a downside: bids take time to replenish whenever the market sees such aggressive buying pressure. As a result, BTC could witness a slight pullback, especially if a sell-the-news event occurs.

Perpetual traders who bought BTC in anticipation of President Trump’s inauguration and the pro-crypto environment expected during his tenure may be taking profits in the coming days, classifying the inauguration as a sell-the-news event. Such investor movements could worsen any BTC correction.

Already, BTC has retraced to the $101,000 level after hitting an all-time high of $109,300 just before the inauguration. However, short-term holders have provided a support/resistance level at their realized price of $89,438, so BTC could have a hard time falling below this range.