On Wednesday, Bitcoin surged past the $107,500 mark, coming within striking distance of its previous record high of $108,786, as investors look for safe havens amid a backdrop of global uncertainties.
The leading cryptocurrency has recently broken out of a two-week trading range between $102,000 and $105,000, achieving new highs in the process.
In the past six weeks, Bitcoin has experienced a remarkable rally, climbing approximately 40% and maintaining a position above the $100,000 threshold for over 11 days. Notably, only four trading sessions in history have seen a daily closing price above the current level, with last week marking a record close at $106,500.
Moody’s Debt Downgrade Sparks Flight to Crypto
The driving forces behind Bitcoin’s ascent include a mix of macroeconomic and geopolitical elements. The recent downgrade of U.S. debt by Moody’s has shaken trust in traditional financial systems, while easing trade tensions between the U.S. and China have encouraged a risk-on atmosphere.
Additionally, ongoing inflation has diminished the purchasing power of fiat currencies, and the Federal Reserve’s slow approach to interest rate cuts has kept real yields high. These factors have contributed to increasing demand for Bitcoin as an inflation hedge.
Analysts Eye ETF Flows as Momentum Driver
In this context, spot Bitcoin ETFs have attracted significant capital, with a notable net inflow of $329 million recorded on May 20, marking the fifth consecutive day of positive capital movement. Spot Ethereum ETFs also reported $64.9 million in net inflows for a third day running.
Every strong price acceleration that rapidly shifts large volumes of coins from loss into profit pushes the 30-day SMA of the UTXO profit-to-loss ratio above 200. The higher the spike, the closer the market moves toward an overheating and/or distribution phase.
Today, the metric… pic.twitter.com/t9MoHFaMHr
— Axel Adler Jr (@AxelAdlerJr) May 21, 2025
Himanshu Maradiya, founder and chairman of CIFDAQ, noted that the market is still in a consolidation phase, with recurring tests of the $106,000 mark. He emphasized that “this fresh regulatory openness, combined with rising institutional participation, continues to position crypto for long-term growth despite short-term range-bound price action.”
Ruslan Lienkha, head of markets at YouHodler, observed a clear trend of accumulation, stating: “While the risk of a downside correction cannot be ruled out—particularly if negative sentiment returns to the equity markets—the likelihood of such a scenario remains relatively low in the short to medium term.”
Analyst Axel Adler from CryptoQuant expressed that if the 30-day moving average of the profit-to-loss ratio exceeds 200, it would indicate an overheated market. He pointed out that the current reading stands at 99, suggesting no signs of excessive euphoria yet.
With Bitcoin approaching its historical peak, market analysts believe that the upcoming trading days are crucial. If bullish momentum can sustain levels above $107,000 and surpass the record of $108,786, a new all-time high seems increasingly possible.
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