Christmas week is shaping up to be interesting for crypto traders, as major digital assets caught a bid Sunday evening with investors positioning themselves for potential holiday gains.

Bitcoin (BTC) led the charge with a 1.12% gain to $89,097.11 as of 8:45 p.m. ET. Ethereum (ETH) posted an even stronger showing at 2.47%, climbing to $3,040.84. XRP (XRP) was essentially flat at $1.93 with a 0.02% gain, while Solana (SOL) added 1.27% to reach $126.91. Dogecoin (DOGE) rose 0.82% to $0.1323.

Short Sellers Feel the Pain

Bitcoin surged overnight but couldn't quite crack through the psychologically important $90,000 barrier. What's notable is the volume surge: trading activity for the apex cryptocurrency jumped 48% to nearly $22 billion in the last 24 hours.

Ethereum, meanwhile, recaptured the $3,000 level after spending a week below it, with trading volume spiking 65% in the last 24 hours. XRP and Dogecoin saw marginal gains but remained relatively quiet.

Here's where things get interesting for the bears. According to Coinglass data, over $180 million was wiped out from the cryptocurrency market in liquidations over the last 24 hours, and short liquidations accounted for more than $100 million of that total. In other words, traders betting against crypto got squeezed hard.

Bitcoin's open interest fell 0.54% over the same period. When you see prices rising while open interest drops, that's often a sign of short covering—bearish traders closing out their positions and admitting defeat.

Despite the gains, the market mood remained gloomy. The Crypto Fear and Greed Index showed "Extreme Fear" sentiment still prevailing.

A few smaller coins had impressive runs. RaveDAO (RAVE) surged 84.82% to $0.7081, Audiera (BEAT) jumped 64.53% to $3.91, and Midnight (NIGHT) climbed 30.71% to $0.1049.

The global cryptocurrency market capitalization stood at $3.01 trillion, following a modest 0.6% increase in the last 24 hours.

Stock Futures Join the Party

Stock futures also ticked higher Sunday evening, suggesting equity traders are feeling optimistic about the shortened Christmas week. The Dow Jones Industrial Average Futures rose 38 points, or 0.11%, as of 7:47 p.m. EDT. Futures tied to the S&P 500 lifted 0.20%, while Nasdaq 100 Futures added 0.31%.

The stock market wrapped up a volatile week in positive territory, helped by softer inflation data that managed to overshadow rising unemployment, which hit a four-year peak. The S&P 500 gained 0.020%, while the tech-focused Nasdaq Composite finished 0.59% higher.

Worth noting for traders: The New York Stock Exchange and the Nasdaq Exchange will shut down early at 1:00 p.m. ET on Christmas Eve (Wednesday) and will be closed Thursday for Christmas.

The Technical Picture and What Analysts Are Watching

Ali Martinez, a widely followed cryptocurrency analyst and trader, identified $89,000 as a critical mid-range level on Bitcoin's 4-hour chart. According to his analysis, a breakout above this level could push BTC toward $91,000-$93,500, while a rejection risks sending it back down to $84,600 support.

Michaël van de Poppe, another popular cryptocurrency commentator, believes the altcoin downturn is nearing a bottom, with a "crucial" level of support in sight.

"Pretty good bounces, indicating that we're likely going to be seeing some green candles from here," Van De Poppe projected.

So Bitcoin finds itself at an inflection point heading into Christmas week. The $90,000 level has proven to be stubborn resistance, but with short sellers getting flushed out and volume picking up, bulls might finally have the momentum they need for a sustained push higher. Then again, with "Extreme Fear" still dominating sentiment and the holiday week typically bringing lighter trading volumes, anything could happen.