What Hurdles Does BTC Need to Overcome After Reaching New Highs?
Coinmarketcap data shows that during the US stock market trading hours on May 21, the price of Bitcoin soared to a record high of $109,767.52. Its market value briefly exceeded $2.16 trillion, surpassing Amazon to become the fifth most valuable asset in the world. As of the time of writing, the trading price of BTC has retreated to around $108,000, with a 24-hour increase of 1.8%.
Amid the high market sentiment, prominent bull Michael Saylor even stated, "If you don't buy Bitcoin at an all-time high, you're missing out."
A Time Bomb in Traditional Markets?
On the same day, the US Treasury market seemed to be experiencing a "crisis."
After the results of the US 20-year Treasury auction showed weak demand, US stocks, bonds, and the currency all plummeted. Deutsche Bank analyst George Saravelos viewed the market's reaction as a clear signal of "collective avoidance of US Treasury assets by foreign buyers." The yield on 10-year US Treasuries briefly rose to 4.607%, the highest level since February 13, while the US dollar index fell by 0.5%.
"This is a hidden time bomb," warned Josh Mandell, a former fixed-income expert and current Bitcoin analyst. He explained, "In the past, we used to say that if a 30-year Treasury bond were to fail to sell, it would be a disaster... If it weren't for the Fed's intervention, we might already be facing the risk of bond rollover failure leading to default."
This warning was quickly validated in the stock market, with the Nasdaq Index plunging 1.5% within an hour and the S&P 500 Index falling 1.3%. This dramatic market volatility precisely explains why more and more funds are flowing into the Bitcoin market.
What Hurdles Does BTC Need to Overcome After Reaching New Highs?
Well-known market analyst Benjamin Cowen discussed in his podcast that during the Bitcoin bear markets in 2014, 2018, and 2022, when other risky assets fell, bond yields actually rose. This situation led to increased government borrowing costs and had a ripple effect on various sectors of the economy, such as mortgages and corporate financing.
From 2015 to 2025, although the market often amplifies the correlation between Bitcoin and the macroeconomy, its own market logic and cyclical patterns are sometimes more critical. Therefore, the correlation between Bitcoin and bond yields can vary in strength depending on the environment.
Now in May 2025, this correlation has dropped to a historical low—Bitcoin is still performing strongly in an environment of high yields. This "anomalous" trend suggests that investors may be reallocating their assets.
As of the close of US markets on Wednesday, the Dow Jones Industrial Average fell 1.69%, the S&P 500 dropped 1.16%, and the small-cap index plummeted 2.35%. These declines, coupled with rising bond yields, indicate that funds are fleeing traditional assets.
$110,000: The Key Battlefield for Bulls and Bears
Against this backdrop, every key price level of Bitcoin becomes extremely important. Well-known crypto trader Skew pointed out on the X platform that $110,000 has become a crucial battleground in the current market structure. According to his analysis, there is a large accumulation of sell orders around this price level. The order book of Binance perpetual contracts shows significantly more sell orders than buy orders, with short positions building up.
"All of this indicates significant liquidity here, which is usually crucial for the market," Skew explained.
This observation coincides with Kretov's view: "Structurally, there is room for explosive upside, but a sharp correction could happen at any time."
A deeper analysis of market data reveals more details. Bitcoin's 24-hour trading volume surged by 34.67%, reaching $66.9 billion, showing a significant increase in market activity. More notably, open interest in the futures market increased by 11.18%, reaching a total of $79.84 billion, indicating that a large amount of capital is betting on Bitcoin's future price movement.
What Hurdles Does BTC Need to Overcome After Reaching New Highs?
However, one phenomenon that warrants caution is the participation of retail investors.
According to CryptoQuant data, when Bitcoin approached its all-time high, the trading volume of retail investors (defined as wallets with transaction amounts of $0–10,000) accounted for only 3.2% of the total. This is in stark contrast to the 30% in December 2024. This difference may imply that the current rally is primarily driven by institutional funds, while retail investors are either holding on to their coins or have already exited the market.
Polymarket Contract Data
Polymarket contract data shows that the probability of Bitcoin breaking through $110,000 before the end of May is as high as 79%. The probabilities of reaching $115,000 and $125,000 by the end of May are 37% and 5%, respectively. As for the likelihood of breaking through $150,000 or $200,000, traders currently assess it at around 1%, reflecting the market's cautious attitude towards higher prices.
Digital Gold at a Crossroads
Faced with such a complex market environment, Bitcoin seems to be at a critical crossroads. On one hand, the turmoil in traditional financial markets continues to drive funds into the cryptocurrency space. On the other hand, the decline in retail liquidity and the pressure from key resistance levels bring uncertainty to the upward trend.
Well-known anonymous analyst apsk32, based on the "power-law curve" model, believes that Bitcoin could reach $200,000 in 2025. This forecast is supported by some technical indicators, such as the recent convergence of Bitcoin's and gold's Sharpe ratios. Jurrien Timmer, Global Macro Director at Fidelity Investments, even suggested that investors could allocate their assets in a 4:1 ratio of gold to Bitcoin.
Historical data shows that the second quarter has always been a "seasonal rally moment" for Bitcoin: so far, this quarter's 28% increase has already made it the fifth-best quarterly performance since 2013. If this rally continues into June, it will once again validate this pattern.
