Bitcoin broke through the $85,000 mark on Monday afternoon, extending a powerful rally from the past several sessions, as investors assess whether the prolonged downturn in digital assets has finally run its course.

According to CoinMetrics data, the cryptocurrency was trading at $84,256 around 6:35 a.m. Eastern Time, marking a gain of roughly 3.8%. Earlier in the session, it touched an intraday high of $85,229, its strongest level since late January. The digital asset has been climbing after a slump that began when it hit an all-time high of over $126,000 in October 2025.

Bitwise Chief Investment Officer Matt Hougan said in an interview Monday that he believes the worst is over. "I think the winter is over and now it's springtime for crypto, and the crocuses are blooming," Hougan stated. "I actually think this is going to be the strongest and longest bull market in crypto's history."

Despite being down for the year overall, Bitcoin has jumped more than 7% over the last five trading days and has surged nearly 35% over the past three months. However, its price still remains considerably below the record highs achieved earlier.

Hougan noted that even through the market's difficult stretch, the "fundamentals have been improving," pointing to increased transaction volume on blockchains and growing participation from major institutions such as BlackRock. "We had this unusual situation where prices were cyclically declining but fundamentals were structurally improving," Hougan explained. "And now I expect prices to catch up to those fundamentals by year-end. I don't think we're going to be looking back at these highs from next year."

Analysts at BTIG wrote in a Sunday note that as long as Bitcoin holds above the $75,000 level, "the bulls can target a break above $82,000 and then make a run at $90,000." Cryptocurrency-related stocks, including MicroStrategy and Coinbase, traded higher in Monday's pre-market session.

Taking Over from AI: A Sector Rotation?

The rally comes on the heels of the U.S. Senate blocking the advancement of the Clarity Act last week. That legislation would have established a regulatory framework for the crypto industry and divided oversight responsibilities between the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Hougan pointed out that additional regulatory developments in the U.S., such as the Genius Act passed last year, have already provided support for cryptocurrency prices. Though the Clarity Act failed to pass, it could paradoxically boost prices, as the SEC and CFTC will now be tasked with crafting the rules themselves.

"This is the most pro-crypto SEC in U.S. history and the most pro-crypto CFTC in U.S. history," Hougan said. "So ironically, with the Clarity Act not passing, we might actually get a more favorable regulatory environment for crypto."

The Bitwise CIO added that investors are increasingly shifting capital out of artificial intelligence-related stocks and into cryptocurrencies. He noted that the earlier AI frenzy had "sucked up all the oxygen in the market. Every momentum investor was focused there. As that trade has cooled off, money is flowing back into crypto."

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