tl;dr
Bitcoin reached a new all-time high above $111,000 this week, with analysts debating whether the rally is fundamentally different from past surges due to stronger institutional support, reduced leverage, and shifting investor behavior. Despite initial optimism, Bitcoin fell 1.8% to around $108,531 f...
Bitcoin soared to an all-time high above $111,000 this week, driven by strong institutional demand and solid market fundamentals. Analysts highlight that this rally appears more structurally sound and less speculative than previous surges, supported by low leverage levels and significant inflows into Bitcoin ETFs. For instance, over $1.3 billion flowed into Bitcoin ETFs within just five days, signaling robust institutional backing.
However, the optimism faced a setback following President Donald Trump’s announcement of a potential 50% tariff on the European Union, which caused Bitcoin to dip approximately 1.8%, settling near $108,531. This tariff news also affected Ethereum and XRP, with ETH dropping around 4% and XRP about 3.7%, reflecting broader market uncertainty.
Expert opinions diverge on the rally’s sustainability. While some, including QCP Capital and MEXC’s COO Tracy Jin, view the trend as less driven by frothy momentum and more by fundamental strength—highlighting the highest weekly close in Bitcoin’s history and a steady six-week gain streak—others see it as part of Bitcoin’s typical cyclical pattern. Analysts at B2BINPAY caution that a correction phase may lie ahead, as 50% retracements have historically marked past Bitcoin cycles.
The widening price divergence between Bitcoin and gold, which remains stable near $3,300, is seen as a reflection of shifting investor psychology and risk appetite rather than a fundamental decoupling of the two assets. Notably, Bitcoin ownership is becoming more mainstream, with approximately 50 million Americans holding BTC, surpassing the 37 million who own gold.
Market sentiment has cooled recently, with fewer traders betting on Bitcoin breaking through $115,000 in the near term. On the decentralized prediction platform Myriad, optimistic predictions for a Bitcoin price above $115,000 by May 25 dropped from 24% to just 15.4% after the tariff announcement, illustrating heightened caution amid ongoing geopolitical and economic uncertainties.