Key Takeaways:
Bitcoin has achieved a new all-time high, surging over 40% in a span of six weeks.
A decline in trade tensions and new trade agreements in the U.S. have fostered a renewed appetite for risk among investors.
Increased ETF inflows signal that additional upside may be on the horizon.
On Wednesday, Bitcoin soared to $109,114.88, marking a new peak after a remarkable 40% gain over the last six weeks. This surge is attributed to waning trade tensions in the U.S. and a renewed influx of capital into the cryptocurrency space. Analysts point to rising ETF inflows and a significant short position close to $1.2 billion, suggesting that further gains could be in store.
This latest milestone coincides with a surprising tariff truce between Washington and Beijing, alongside a limited trade agreement with the U.K., which together have improved the broader economic outlook. As Bitcoin ETFs attract more investment and a cluster of short positions forms around the $108,000 mark, experts are forecasting a potential squeeze that could push prices towards $120,000.
Crypto Markets Respond Positively to Trade Agreements
The bullish sentiment in the cryptocurrency markets gained momentum following President Trump’s recent softening of his trade stance, indicating a willingness to pursue new trade arrangements and easing tensions with crucial economic partners.
This shift in policy has revitalized investor interest in risk assets, with Bitcoin and leading altcoins seeing noticeable gains.
Earlier this month, the United States and China agreed to a temporary reduction of tariffs on goods exchanged between the two nations, signaling a lull in trade hostilities.
This agreement, outlined in a joint statement in Geneva, allows for a 90-day period during which both countries will negotiate for deeper economic cooperation.
The U.S. is set to reduce tariffs on Chinese imports from 145% to 30%, while China will cut tariffs on American products from 125% to 10% during this period.
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 limited trade agreement was recently revealed between the U.S. and the U.K., dubbed the “Economic Prosperity Deal,” aimed at reducing tariffs and regulatory barriers, which should enhance market access and stimulate economic collaboration.
BlackRock Leads in Bitcoin ETF Inflows
In Asia, high-net-worth investors are transitioning their investments away from U.S. dollar-denominated instruments, redirecting capital toward gold, Chinese equities, and cryptocurrencies, indicating strong regional interest in Bitcoin.
The current record high for Bitcoin is significantly influenced by robust net spot demand in both the institutional and retail sectors, with spot buying being the driving force rather than leverage.
BlackRock’s iShares Bitcoin Trust (IBIT) is at the forefront of this trend, having captured a large share of U.S. ETF inflows since mid-April.
Analysts at Galaxy Digital recently reaffirmed Bitcoin’s evolving reputation as a digital store of value, reflecting sentiments expressed by Jay Jacobs, Head of Thematics at BlackRock. Jacobs noted that many countries are now diversifying their reserves away from the U.S. dollar toward gold and Bitcoin.
Favorable Market Structure for Bullish Trends
The prevailing market structure further supports a bullish outlook for Bitcoin. The cryptocurrency has remained above the $100,000 mark for nearly two weeks, with recent closing prices around $106,500 indicating a historic level of strength.
Historically, only four other sessions have been recorded above the current price, highlighting the significance of this breakout from a technical standpoint.
Additionally, data from CoinGlass shows that approximately $1.2 billion in short positions are concentrated in the $107,000 to $108,000 range. A sustained upward movement could lead to forced liquidations, potentially driving prices sharply higher towards the $115,000-$120,000 range.
Increased ETF inflows—alongside the growing popularity of Ethereum spot ETFs—create an environment conducive to further price appreciation.
Recent figures from Farside indicate that Bitcoin ETFs have seen consistent net inflows over the past five trading days, reflecting a resurgence in institutional support.
From May 14 to May 20, all but one day registered net positive flows, with May 19 marking a standout day with a net influx of $667.4 million, followed by $329.2 million on May 20.
These statistics suggest that investors are strategically positioning themselves ahead of potential price breakouts, likely in response to an improved macroeconomic climate and clearer regulatory frameworks.
While analysts caution against possible profit-taking, the profit-to-loss ratio on-chain remains below critical overheating levels (99 compared to a threshold of 200), highlighting that the market is not yet in a precarious state.
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 record high appears to possess substantial momentum. If bullish sentiment continues and macroeconomic conditions remain stable—especially with the Federal Reserve facing challenges due to weak long-bond demand—the path to $120,000 within the month seems attainable.
The post Bitcoin Nears $110K as Price Hits ATH – $120K Possible This Month? appeared first on Finance Newso.
