Bitcoin's price is nearing the $100,000 mark again, reaching its highest point since late February as investor sentiment improves across financial markets. The cryptocurrency had recently experienced significant downward pressure, dropping as much as 30% from a peak of nearly $109,000 on January 20th.

This downturn was largely attributed to the impact of Trump's tariff policies, which significantly affected both the stock market and the cryptocurrency market.

However, Bitcoin has since rallied, climbing as much as 3.1% to $97,483, its highest level since February 21st. The last time Bitcoin reached $100,000 was on February 7th. Smaller cryptocurrencies, including Dogecoin and Ether, also saw substantial gains, with Dogecoin rising 4.8% and Ether up 3.3%.

The market rebound is attributed to increased spot trading activity, which offset the declining demand for leveraged derivative assets. Traders are now prioritizing momentum-based trading strategies over macroeconomic factors like inflation and tariffs, which heavily influenced Bitcoin's price earlier this year.

Non-traditional Bitcoin and Ether-based exchange-traded funds (ETFs) received over $3.2 billion in investor inflows last week. IBIT, the iShares Bitcoin Trust ETF, saw its largest inflow of the year, receiving $1.5 billion.

Market demand for options has also increased significantly, with investors holding a large number of options contracts with a $100,000 strike price. Despite ongoing volatility, the market remains relatively stable, as liquidation levels for both long and short-term crypto positions show minimal change.

Chris Newhouse, Director of Research at DeFi trading firm Ergonia, explains the market's preference for momentum-based trading driven by spot demand. He notes that Bitcoin exhibits dual macroeconomic patterns, behaving similarly to both gold and equities. Increasingly, short-term market momentum, fueled by spot market demand, is shaping Bitcoin's price.

The market initially struggled after Trump's tariff announcement last month, as investor risk aversion led to widespread liquidations of crypto futures. However, the current trend suggests renewed confidence in the digital asset space.

Also read: Bitcoin ETFs Amass $1B Inflow in 4 Days As BTC Builds Momentum