Bitcoin surges above $89,000, posting a rare gain during American trading hours.

Crypto markets started the U.S. trading day on a modestly positive note, with Bitcoin (BTC) reclaiming the $89,000 level after dropping to $87,000 just a day earlier. Open interest data, however, suggests the move is largely short-covering rather than new longs entering the market.

Bitcoin’s relative strength during U.S. trading hours is notable after a month-long trend of declines in American sessions. According to Velo data, BTC has lost roughly 20% cumulatively during U.S. hours over the past 30 days. Wednesday’s modest rally coincided with falling open interest, which dropped from 514,000 BTC to 511,000 BTC per Coinglass data, indicating traders were closing short positions rather than initiating fresh leveraged longs.

Crypto-focused equities, including Coinbase (COIN), Robinhood (HOOD), and Circle (CRCL), remained largely unchanged, in line with the broader S&P 500 and Nasdaq. Wintermute strategist Jasper de Mare attributed the subdued market to year-end de-risking, record ETF outflows, and thin holiday liquidity.

All three major crypto assets continue to trade below key systematic levels, with price movements primarily influenced by rollover flows and tax-related positioning. Spot Bitcoin ETFs recorded $19.3 million in net outflows on Monday, marking seven consecutive days of redemptions. Mid-December alone saw $1.29 billion withdrawn from Bitcoin funds, including a $157 million single-day outflow from BlackRock’s IBIT. While IBIT has accumulated $25 billion in inflows year-to-date, December’s risk-off rotation appears linked to tax-loss harvesting. Altcoins, largely outside IRS wash-sale rules, have avoided similar selling pressure.

Derivatives activity also underscored market caution: over $27 billion in BTC and ETH options expired on Dec. 26, the largest single-day expiry in crypto history, according to Deribit. Funding rates and open interest, which peaked at $70 billion in June, have steadily declined heading into year-end.

Bitcoin’s seven-day realized volatility fell sharply into Dec. 25 but has recently begun to rise, driven by erratic intraday swings. De Mare cautioned traders against relying too heavily on short-term signals until institutional flows return in early January.