Bitcoin Surges Past $98K Amid Institutional Buying, but Analysts Warn of Potential Volatility Ahead

Following a week of negative price activity, Bitcoin (BTC) jumped beyond $98,000 in a spectacular turn of events on Christmas Eve, signifying a clear comeback.

After a week of downturn, Bitcoin (BTC) made a spectacular comeback on Christmas Eve, surging past the $98,000 mark in a stunning development.

The world's leading digital asset encountered another day of price increase on Friday, as BTC/USD gained over 3% in a day. The surge was largely driven by strong spot buying pressure and institutional accumulation.

Japanese investment company Metaplanet Inc. further exhibited the institutional interest in the asset class, with a recent purchase of 619.7 Bitcoin for nearly $58.9 million.

The latest surge saw BTC/USD reach local highs of $98,020 on Bitstamp, triggering around $40 million in short liquidations over 24 hours. Trading data showed significant order book volume from large spot buyers, indicating strong institutional demand despite the recent market volatility.

The recovery comes as key players continue their aggressive accumulation strategy. Leading corporate Bitcoin holder MicroStrategy unveiled plans to expand its bold “21/21 Plan” with a new shareholder resolution.

The company aims to substantially increase its authorized share count, potentially enabling billions of dollars in additional Bitcoin purchases. Currently, MicroStrategy holds about 444,260 BTC, acquired at an average price of $62,257 per coin.

Technical analysts, however, remained skeptical about the sustainability of the rally. To confirm a positive trend reversal, Bitcoin needs to reclaim lost support levels, according to popular analyst Rekt Capital.

The price action of the bitcoin has been particularly volatile following the Federal Reserve's recent hawkish statements on interest rates.

On-chain data also painted a potentially alarming picture. The average Bitcoin transaction size over the past two days exceeded $306,100 — the highest in nearly two years, suggesting increased selling pressure from whale investors. This metric, combined with the current market structure, hinted at further downside risk.

Technical analysis points to immediate support for Bitcoin at $90,500; should present levels fail to hold, the next major level is at $88,000. On the upside, resistance lies at $99,426 and could move to $108,353 if positive momentum resumes.

Market observers remained divided on Bitcoin's short-term outlook. While institutional buying provided a fundamental support, the combination of macro factors and whale selling activity could introduce further volatility as we approach the end of the year.