Bitcoin has surged past the $109,000 mark, peaking at an all-time high of $109,827 on May 21, 2025. This remarkable rally, largely perceived as driven by organic demand rather than speculative leverage, has sparked a flurry of discussion among traders and analysts. The sustainability of this upward momentum remains a pressing question.
Spot Markets Take the Lead
Interestingly, this Bitcoin ascent appears to be powered by spot markets rather than derivatives, a shift that many see as a healthier indicator of market strength. The absence of a Coinbase premium—where Bitcoin’s price on Coinbase exceeds other exchanges—suggests a more balanced buying pressure across platforms. This contrasts starkly with the frenzied trading of January 2025, when Bitcoin hit $109,346 and the futures premium soared to 15%, highlighting the dominance of leveraged positions. This trend echoes previous market movements, such as when Bitcoin surpassed $95K amid resilient U.S. stocks, raising questions about market perception.
“Current market conditions are fundamentally different,” notes Clara Townsend, a cryptocurrency analyst at FinTech Insights. “The balanced order books and substantial inflows into spot Bitcoin ETFs underscore a solid base of spot-driven interest.” Between May 15 and May 20 alone, U.S. spot Bitcoin ETFs saw net inflows of $1.37 billion, reinforcing the narrative of robust spot market demand.
Leverage Lightens the Load
The derivatives landscape paints a picture of restraint. The annualized Bitcoin futures premium sits comfortably within the 5% to 10% neutral range, a far cry from the exuberant spikes of past bull runs. This more subdued leverage environment mitigates fears of a bubble driven by speculative excess.
Adding weight to this perspective, forced liquidations of bearish Bitcoin futures positions were modest at $170 million from May 18 to May 21. To put this in context, the May 9 rally that pushed Bitcoin to $104,000 saw a staggering $538 million in liquidations over a mere three days. “We’re seeing a more sustainable rise,” mentions Oliver Craig, a market strategist at CryptoSavvy. “The market is less prone to the violent swings typically associated with high leverage.” This aligns with previous observations of Bitcoin’s surge past $94,000, driven by institutional interest and market optimism.
Macro Factors and Future Projections
Of course, external economic factors have also played a role. The U.S. Federal Reserve’s liquidity injections, combined with lackluster bond sales, create a favorable backdrop for risk-on assets like Bitcoin. As recession fears linger, Bitcoin’s appeal as a hedge against economic instability continues to grow.
Yet, the path forward is not without its hurdles. Macroeconomic uncertainties, such as ongoing trade tensions, could temper Bitcoin’s momentum. “While the fundamentals look strong, we can’t ignore the broader economic landscape,” cautions Townsend. “There’s always a risk that external shocks could disrupt this rally.”
Looking Ahead
As Bitcoin navigates these choppy waters, the key question remains: Will this rally continue? The underlying market dynamics suggest potential for further gains, especially if macroeconomic conditions remain supportive. However, as with any volatile asset, caution and vigilance are paramount.
For now, Bitcoin’s journey past $110,000 remains an open-ended narrative—one that will be shaped by a confluence of market forces, investor sentiment, and global economic trends. The coming weeks (or perhaps months) will be crucial in determining whether this rally has the stamina to endure or whether it will be yet another chapter in Bitcoin’s storied history of volatility.
Source
This article is based on: Bitcoin hits new highs in the absence of ‘unhealthy’ leverage use — Will the rally continue?
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
