On the technical side, 90,000 dollars will be the key level to test the quality of the market.

Written by: Bao Yilong, Wall Street Insights

Bitcoin has broken through 85,000 dollars, reaching a new high in eight months. Against the backdrop of setbacks in legislative regulation of cryptocurrencies in the United States, digital assets not only did not remain under pressure but instead quickly regained ground, prompting Bitwise Chief Investment Officer Hougan to announce that the "crypto winter" has ended, and the market has entered a "crypto spring".

Hougan clearly judges that the nearly one-year "crypto winter" has ended and expects this to possibly become the strongest and longest-lasting bull market in the history of cryptocurrencies.

In the past 5 days, Bitcoin has risen over 7%, with an increase close to 35% in the past 3 months. From a technical perspective, BTIG analysts believe that as long as it maintains support near 75,000 dollars, bulls can further push towards the 90,000 dollar region.

This rebound occurred in the context of the failure of the "Digital Asset Market Clarity Act" to pass a procedural vote in the Senate, breaking the simple logic that "legislative failure is bearish", as the market began to reassess the true impact of regulatory uncertainty.

Legislative setbacks did not hinder the rebound

Wall Street Insights mentioned that last week, the "Digital Asset Market Clarity Act" failed to meet the 60-vote threshold needed to advance, receiving 49 votes for and 50 votes against in the Senate procedural vote.

This bill aims to establish a more comprehensive regulatory framework for the U.S. digital asset market, clarifying the regulatory division of labor between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), and is regarded as one of the most important regulatory legislations in recent years by the cryptocurrency industry.

Disagreements regarding issues such as government officials' conflicts of interest, stablecoin rewards, and the impact on the banking industry were the main points of contention in the negotiations. After the voting results were announced, Bitcoin and some cryptocurrency concept stocks briefly fell but then quickly rebounded.

Hougan believes that in the absence of the passage of the "Clarity Act", the SEC and CFTC can still rely on existing authority to formulate rules in the short term, and legislative failure does not necessarily mean a deteriorating regulatory environment.

Strategy Executive Chairman Michael Saylor also referred to the setback of this bill as a "positive turning point" for the digital asset industry, suggesting that the industry should leverage the existing regulatory framework to strive for more favorable rules instead of accepting restrictions that may be solidified long-term; the more important task in the next two years will be to expand the actual application scale of digital financial products.

Funds flowing back from AI: the core logic of the crypto spring

Hougan's core basis for judging the end of the "crypto winter" is not merely a price rebound, but a divergence between prices and fundamentals.

He noted that during the recent period when cryptocurrency prices fell, the industry's fundamentals did not deteriorate simultaneously: trading activity on the blockchain increased, and large financial institutions like BlackRock further engaged in the digital asset market, creating a pattern of "cyclical price decline, structural improvement in fundamentals."

He forecasts that cryptocurrency prices may further catch up with changes in fundamentals later this year.

More noteworthy is the change in capital flow. Hougan stated that investors are rotating from AI stocks back to cryptocurrencies. He added that the previous AI boom "almost siphoned off all attention in the market. Any momentum-chasing investor focused on AI. Now, with AI markets stabilizing somewhat, we are beginning to see funds flowing back into the cryptocurrency market."

If this judgment holds, it implies that the driving factors for Bitcoin's current rebound have shifted from mere safe-haven or policy expectations to a broader repositioning of asset allocation, with the decreased crowding of AI trading providing a source of incremental funds for crypto assets.

The 90,000 dollar level becomes the next observation point

Looking at a longer cycle, Bitcoin has still not completely emerged from its previous adjustment.

Bitcoin reached an historical high of about 126,000 dollars last October, subsequently halving, and dropped to around 57,600 dollars in early July of this year; even with the recent significant rebound, the current price remains about one-third lower than the historical high.

This indicates that the nature of the current rebound is closer to recovery from a deep adjustment rather than confirming the start of a new historical high. Analysts believe that whether 90,000 dollars can be effectively broken will be a key observation point to test the quality of the "crypto spring":

• If the price encounters resistance and falls back near 90,000 dollars, the market may need to reassess the sustainability of the capital rotation;
• If it breaks out with volume, it will further reinforce Hougan's judgment about "the strongest and longest-lasting bull market in history."

Subsequently, attention can be paid to the Federal Reserve's interest rate path and the direction of long-end U.S. Treasury rates, as they remain core macro variables affecting the valuation of crypto assets.