Author | White55, MarsBit
Source | MarsBit
Bitcoin price is oscillating around $110,000, influenced by technical overbought indicators and market sentiment divergence. Institutional funds continue to flow in, driving the market, but retail investors remain cautious. Macro factors such as Trump's tariff policies, Federal Reserve policy changes, and tech stock performance impact Bitcoin prices. Technical innovations like Lightning Network and RGB protocol are changing Bitcoin's application scenarios. Bitcoin's future may develop in bull, oscillating, or bear market scenarios, depending on various market and policy factors. Overall, Bitcoin's price fluctuations reflect the collision between old and new financial orders.
I. Price Stalemate: Dual Game of Technical and Sentiment Aspects
(1) The "$110,000 Psychological Curse": Misalignment of Historical Highs and Market Expectations
After breaking through $100,000 in April 2025, Bitcoin initiated a new round of price increase, briefly touching a historical high of $111,957 in mid-May. However, the price has since oscillated in the $105,000-$112,000 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 current market's complex contradictions.
Technically, Bitcoin's weekly RSI indicator has entered the overbought zone, with MACD momentum bars continuously narrowing, showing 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 exchange net inflows. 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, Bitcoin 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.
Image 1: Bitcoin 2-month Futures Annualized Basis Rate.
(2) Market Sentiment's "Hot and Cold": Institutional Inflow Tide and Retail Caution
Institutional funds continue to be the core support for the market. Data shows that from May 19-25, US spot Bitcoin 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 that traditional asset management giants are becoming the main price setters for Bitcoin.
Notably, JPMorgan announced on May 19 that clients can purchase spot Bitcoin ETFs through brokerage accounts. While not directly involving custody services, the potential entry channel of its $6 trillion client deposits could trigger a "catfish effect" - Goldman Sachs, Citigroup, and others might 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 by 320% year-on-year. This disparity reflects ordinary investors' anxiety about high-level oscillation, sharply contrasting with institutions' "buy the dip" strategy.
II. Macro Variables: Trump's Policies, Federal Reserve Shift, and Tech Stock Correlation Trio
(1) Trump's "Tariff Game": How Geopolitics Reshapes Crypto Market Pricing Logic
On May 26, Trump postponed the 50% tariff on EU imports to July 9, seemingly easing trade war escalation risks but implicitly containing political maneuvering. Historical data shows Trump's tariff policies were highly volatile - in February 2025, his sudden announcement of a 25% tariff on EU cars caused Bitcoin to plummet 12% in a single day.
The market is more focused on the progress of his crypto asset reserve strategy. Although the White House summit in March only proposed a stablecoin legislative framework, Senator Lummis's "National Bitcoin Reserve Act" draft has entered the legislative process. The bill requires the US Treasury to purchase 5% of circulating Bitcoin (about 1.05 million coins) in the next 5 years, which would directly create nearly $100 billion in demand if implemented.
(2) Federal Reserve's "Inflation Puzzle": PCE Data May Be a Breakthrough Catalyst
The market is highly sensitive to the PCE inflation data to be released on May 30. Currently, CME rate futures show a 68% probability of the Federal Reserve cutting rates by 25 basis points in June, but if core PCE year-on-year growth exceeds 2.9% (previous 2.8%), it might reverse easing expectations. Notably, Bitcoin's 90-day correlation coefficient with the Nasdaq index has dropped from 0.75 at the beginning of the year to 0.32, indicating it is moving away from the traditional risk asset framework towards a "digital gold" narrative.
(3) NVIDIA's Earnings Report "Butterfly Effect": AI Computing Power Revolution and Crypto Market's Hidden Connection
NVIDIA will release its quarterly report on May 28, potentially influencing Bitcoin through two paths:
1. Computing Power Competition: If new-generation AI chip demand exceeds expectations, it might drive up GPU prices, indirectly increasing Bitcoin mining machine update costs and squeezing miners' profit margins;
2. Capital Diversion: If tech stocks rise due to a positive report, it might attract some crypto market funds to traditional stock markets, intensifying Bitcoin's short-term volatility;
III. Institutional Covert War: MicroStrategy's "Hoarding Economics" and ETF Ecosystem Evolution Theory
(1) MicroStrategy's "Extreme Operation": Strategic Ambition Behind Balance Sheet Restructuring
Michael Saylor's MicroStrategy added 4,018 Bitcoins at an average price of $106,237 from May 19-25, bringing its total holdings to 324,000 coins (worth about $34.5 billion). Interestingly, the company's convertible bond financing coupon rate has surged from 0.625% in 2024 to 6.25%, showing capital markets are changing their risk pricing for its aggressive strategy.
This "debt-driven hoarding" model is creating a demonstration effect. Data shows that as of May, 17 S&P 500 companies publicly hold Bitcoin, with a total scale of $48.7 billion. Companies like Tesla and Block are even exploring using Bitcoin to pay supply chain invoices, promoting its evolution from a reserve asset to a medium of circulation.
(2) ETF Ecosystem's "Matthew Effect": Market Restructuring Under BlackRock-Fidelity Duopoly
Since the US spot Bitcoin ETF was approved in January 2024, total Assets Under Management (AUM) has exceeded $120 billion. BlackRock IBIT ($48.6 billion) and Fidelity FBTC ($39.2 billion) occupy 72% of the market, forming an absolute monopoly. This centralization trend might raise regulatory concerns - the SEC is studying whether to impose new rules on ETF issuers, requiring disclosure of reserve asset addresses and on-chain verification mechanisms.
discusses The deeper impact is that ETF is changing Bitcoin's volatility characteristics. daily net in/flow/outflow data calculations,F flows 38% price fluctuations, meaning traditional financial market opening hours (Eastern Time 9:30-16:00) are becoming the main battlefield for Bitcoin price volatility, forming a paradox with the early "decentralized" feature of 7x24 continuous trading.
Section 4: Technical Revolution: Layer2 Ecosystem Explosion and the Feasibility Experiment of "Bitcoin"benchmark" 1Network 2. .The "Singularity Moment" of Payment Track Bitcoin's Layer2 solution Lightning Network (LN2.0) achieved major breakthroughs in May: - Channel capacity broke through 8000 BTC, a year-on-year increase of 320%; - Supports Atomic Multi-Path Payment (AMP), increasing single transaction processing capacity to 0.1 BTC; - Collaborated with Visa to pilot cross-border remittances, reducing fees to below 0.3%. These developments are changing Bitcoin's utility boundaries. TheThe Salvadthat 20% servant salaries will be distributed through Lightning Network, and Amazon Mexico has already accepted Bitcoin Lightning payments. If this "small frequent payments + value storage" dual function is consolidated, Bitcoin may truly challenge traditional payment giants like Visal visaP(Protocol's "Smart Contract": The Covert War Challenging Ethereum based on Bitcoin's UTXO model completed v0.5 version upgrade in Turing contract functionality for the first time. Although the current ecosystem is small (total locked volume only $120 millionTC), its client-side verification and off-contract chain calculation architecture shows unique advantages in privacy and scal. Notably, MakerDAO founder Rune Christensen has announced exploring transferring part of DAI reserves to RGB protocol, which may become a landmark event of DeFi funds flowing back to Bitcoin ecosystem Section 5Deduction: Bitcoin's Fate Under Three Paths ( 11 dollar tug-of war essentially reflects the collision of new and old financial orders. Trump From's to's sheet revolution, from Network payment penetration to ETF institutional transformation, multiple forces are reshaping the economic meaning of this experiment. Historical experience shows that when Bitcoin's "death notices" flood media, it's often an opportunity for long-term investors to layout contrarily. When the market loses direction in the clamor, we should perhaps return to Satoshi Nakamoto's original white paper vision - "a pure point-to-point electronic cash system". In this sense, 2025's price fluctuations are merely a footnote to this great social experiment, and the true revolution has long been quietly growing in code and consensus.
