In a telegram note, market maker Flowdesk said the rally reflected traders being caught offside after the holiday period, with suppressed funding rates through December setting the stage for short covering and risk-on repositioning once public liquidity returned. In that environment, mid- to large-cap tokens, such as XMR, ZEC, and SOL, moved aggressively even as BTC slipped back into a range-bound pattern.
Flowdesk added that bitcoin’s near-term price action is increasingly being driven by ETF flows rather than conviction trading, leaving the market without a clear macro narrative. Volatility markets echoed that uncertainty, with traders rolling bullish bets further out the curve as near-term upside failed to materialize.
The firm noted that stablecoin flows have also been choppy, with USDT trading at a small discount at times, a sign of capital rotating in and out rather than committing decisively.
For now, the result is a market willing to chase relative value and thematic trades like privacy tokens, while bitcoin waits for a catalyst strong enough to break it out of its tightening range.