Key Takeaways:
Bitcoin has surged past its previous all-time high, rising over 40% in just six weeks. The renewed appetite for risk among investors, spurred by easing trade tensions and new U.S. trade agreements, has played a significant role in this rally. Moreover, increasing inflows into exchange-traded funds (ETFs) point to potential further gains.
On Wednesday, Bitcoin surged to $109,114.88, establishing a new all-time high after a substantial six-week climb. The upswing has been attributed to a softening of U.S.-China trade hostilities, which has drawn investors back to the cryptocurrency sector. Analysts are noting that the presence of a $1.2 billion short position could lead to a squeeze, potentially propelling Bitcoin toward the $120K mark.
Crypto Markets Surge After Trump’s Trade Deals
The bullish trend in the cryptocurrency market seems to have gained momentum following President Trump’s recent softening of trade rhetoric. His willingness to explore new agreements and de-escalate tensions with significant trading partners has reinvigorated investor sentiment.
Bitcoin and major altcoins have seen a direct benefit from this renewed risk appetite among investors. Earlier in May, a temporary reduction in tariffs between the U.S. and China was announced, signifying a détente in trade relations. This was encapsulated in a joint statement made in Geneva, which allows for a 90-day period to negotiate further economic collaboration.
Under the terms of this accord, the U.S. will decrease tariffs on Chinese imports from 145% to 30%, while China will cut its tariffs on American goods from 125% to 10% during the same timeframe.
BREAKING: The US and China have reached a trade agreement on a 90 day pause.
The U.S. will cut tariffs on Chinese goods to 30% (from 145%) for 90 days, while China will lower its levies to 10% (from 125%) for 90 days, according to US Treasury Secretary Bessent. pic.twitter.com/5c7frxxNoW
— Sawyer Merritt (@SawyerMerritt) May 12, 2025
Additionally, a recent limited trade agreement between the U.S. and the UK, termed the “Economic Prosperity Deal,” has also come to light. This agreement aims to reduce both tariff and non-tariff barriers, thereby enhancing market access and fostering closer economic ties between the two nations.
BlackRock’s Dominance in Bitcoin ETF Inflows
In Asia, there’s a noticeable shift among high-net-worth investors who are moving their capital away from U.S. dollar-denominated assets and toward gold, Chinese stocks, and cryptocurrencies, underscoring a growing regional interest in Bitcoin.
A significant driver behind this most recent Bitcoin all-time high is the robust demand for spot trading observed across both institutional and retail arenas, characterized mainly by actual buying rather than leverage. Leading the momentum is BlackRock’s iShares Bitcoin Trust (IBIT), which has captured a significant portion of U.S. ETF inflows since mid-April.
Analysts from Galaxy Digital have reiterated Bitcoin’s emerging status as a digital store of value. Their observations echo sentiments expressed by Jay Jacobs, head of Thematics at BlackRock, who noted that countries are increasingly diversifying away from the U.S. dollar in favor of gold and Bitcoin.
Market Structure Supports Bullish Case
Further analysis of market conditions supports the bullish sentiment. Bitcoin has remained above the $100,000 mark for almost two weeks, with recent closing prices around $106,500 indicating strong historic performance.
This current breakout is significant from a technical perspective, as only four previous trading sessions have ended at or above this level. Data from CoinGlass reveals a concentration of approximately $1.2 billion in short positions between $107,000 and $108,000, suggesting that continued upward movement could force liquidations, driving prices sharply higher toward the $115,000 to $120,000 range.
The trend in ETF inflows remains positive, and with Ethereum spot ETFs also gaining traction, the overall environment appears conducive to further price increases.
In fact, Farside’s data shows consistent net inflows into Bitcoin ETFs over the past five trading days, which signifies a resurgence in institutional confidence. From May 14 to May 20, there were net positive flows almost every day, with a noteworthy $667.4 million net inflow recorded on May 19, followed by $329.2 million on May 20.
These figures indicate that investors are increasingly aligning themselves for potential price breakouts, likely spurred by favorable macroeconomic conditions and clearer regulatory frameworks. While analysts caution that profit-taking could occur, the current profit-to-loss ratio on-chain remains below overheating thresholds, suggesting room for continued growth.
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
Bitcoin’s ascent to a new all-time high appears to have solid support. Should the bullish trend remain intact and macro conditions stabilize, particularly with potential pressures on the Federal Reserve due to weak long-bond demand, reaching $120,000 within this month may be a realistic target.
The post Bitcoin Nears $110K as Price Hits ATH – $120K Possible This Month? appeared first on Finance Newso.
