I. Price Stalemate: Dual Game of Technical and Sentiment Factors

(1) The "Psychological Spell" of $110,000: Misalignment between Historical High and Market Expectations

After breaking through $100,000 in April 2025, BTC initiated a new round of price increase, reaching a historical high of $111,957 in mid-May. However, the price has since oscillated in the 105,000-112,000 USD range without forming an effective breakthrough. This phenomenon sharply contrasts with the market's rapid uplift after breaking $100,000 in December 2024, reflecting the complex contradictions in the current market.

Technically, BTC's weekly RSI indicator has entered the overbought zone, with the MACD momentum column continuously narrowing, indicating a decline in short-term upward momentum. On-chain data shows that long-term holders' (LTH) proportion has dropped from 76% at the beginning of the year to 72%, with some "old miners" and early investors starting to take profits, leading to increased net inflows to exchanges. This chip loosening phenomenon bears similarities to the characteristics of the late 2021 bull market.

On the other hand, the derivatives market reveals entirely different signals. As of May 26, BTC futures annualized basis rate remains at 8%, far lower than the extreme 20% when breaking $100,000 in December 2024, indicating that leveraged long positions are not overly aggressive. Meanwhile, the options market's Delta skew index (-6%) shows put options trading at a discount, a typical bull market structure, contrasting with the +15% skew during the 2024 bear market.

Figure 1: BTC 2-month Futures Annualized Basis Rate.

(2) Market Sentiment's "Hot and Cold": Institutional Inflow and Retail Investor Caution

Institutional capital continues to be the core support for the market. Data shows that from May 19-25, US spot BTC ETF net inflows reached $2.75 billion, a weekly record since Trump's election in December 2024. BlackRock IBIT and Fidelity FBTC account for 80% of this, indicating traditional asset management giants are becoming the main price setters for BTC.

Notably, JPMorgan announced on May 19 that clients can purchase spot BTC ETFs through brokerage accounts. While not directly involving custody services, this opens a potential entry point with its $6 trillion in client deposits, potentially triggering a "catfish effect" where Goldman Sachs, Citigroup, and others may be forced to follow to maintain competitiveness.

In contrast, retail investors remain cautious. The crypto fear and greed index dropped from 78 (extreme greed) in early May to 65 (greed), while Google searches for "Bitcoin bubble" increased 320% year-on-year. This disparity reflects ordinary investors' anxiety about high-level oscillation, sharply contrasting with institutions' "buy the dip" strategy.

• Channel capacity breaks through 8000 BTC, a year-on-year increase of 320%;
• Support for Atomic Multi-Path Payments (AMP), with single transaction processing capacity increased to 0.1 BTC;
• Pilot cross-border remittance cooperation with Visa, with transaction fees reduced to below 0.3%.

These advancements are changing the utility boundaries of Bitcoin. The Salvadoran government announced that 20% of civil servants' salaries will be distributed through the Lightning Network, and Amazon Mexico has already accepted Bitcoin Lightning payments. If this "small-amount high-frequency payment + value storage" dual function is consolidated, Bitcoin may truly challenge traditional payment giants like Visa and PayPal.

(2) RGB Protocol's "Smart Contract Breakthrough": A Covert War Challenging Ethereum

Based on Bitcoin's UTXO model, the RGB protocol completed its v0.5 version upgrade in May, achieving Turing-complete smart contract functionality for the first time. Although its ecosystem is currently small (with a total locked value of only $120 million), its architecture of client-side verification and off-chain computation demonstrates unique advantages in privacy and scalability. Notably, MakerDAO founder Rune Christensen has announced exploring the transfer of part of Dai's reserves to the RGB protocol, which could become a landmark event of DeFi funds flowing back into the Bitcoin ecosystem.

V. Future Scenario Simulation: Bitcoin's Fate Under Three Paths

(1) Bull Market Scenario (Target by End of 2025: $180,000-$250,000)

Triggering Conditions:

• US PCE inflation data below 2.6%, Federal Reserve launches rate cut cycle in June;
• National Bitcoin Reserve Act passes, Treasury initiates monthly Bitcoin purchase plan;
• Bitcoin Layer 2 ecosystem locked value breaks $10 billion, payment scenario users exceed 50 million.

Technical Pattern: Weekly-level "cup and handle" formation will form, accelerating after breaking $112,000, replicating the momentum effect of breaking $100,000 in December 2024.

(2) Oscillation Scenario (Price Range: $100,000-$140,000)

Core Variables:

• NVIDIA financial report shows weak AI chip demand, tech stock pullback drags down risk assets;
• Trump's tariff policies repeatedly trigger market risk aversion;
• ETF fund inflow rate drops below $1 billion weekly average.

Market Characteristics: Increased miner selling pressure, extended mining difficulty adjustment cycle, derivative fund rate continuously hovering at low levels.

(3) Bear Market Scenario (Pullback Target: $74,000-$85,000)

Risk Catalysts:

• US SEC conducts surprise investigation into ETF reserve fund custody, triggering trust crisis;
• Middle East geopolitical conflicts escalate, pushing up oil prices, global inflation expectations reverse;
• Quantum computing breakthrough raises concerns about Bitcoin encryption algorithm security.

On-chain Signals: Exchange net inflow exceeds 50,000 BTC for three consecutive weeks, long-term holder position ratio drops below 70%.

Conclusion: Finding Certainty in Uncertainty

Bitcoin's $110,000 tug of war is essentially a microcosm of the collision between old and new financial orders. From Trump's tariff negotiations to MicroStrategy's balance sheet revolution, from Lightning Network's payment penetration to ETF's institutional transformation, multiple forces are reshaping the economic significance of this experiment. Historical experience shows that whenever Bitcoin's "death notices" flood the media, it's often an excellent opportunity for long-term investors to make contrarian layouts. When the market loses direction in the noise, we should perhaps return to Satoshi Nakamoto's original white paper vision - "a purely peer-to-peer electronic cash system". In this sense, the price fluctuations in 2025 are merely a footnote to this great social experiment, with the true revolution already quietly growing in code and consensus.