Bitcoin ($BTC) has broken fresh ground, setting a new all-time high above $109,000 on 21 May. The rally, seen across cryptocurrency markets, was fuelled by easing geopolitical tensions and a favourable macroeconomic.
The digital asset rose to an intraday peak of $109,259.94, closing at $109,130.61 – up more than 2% on the day – according to data from Binance.
The move capped a blistering six-week surge, where Bitcoin soared nearly 40%, reversing months of sideways action and bearish sentiment.
A significant driver behind this rally has been renewed investor confidence following recent trade deals between major global economies.
Earlier in May, the United States and China reached a temporary agreement to ease tariffs on one another’s imports.
The joint statement, released from Geneva, announced a 90-day negotiation window aimed at enhancing economic cooperation.
Under this pact, the US agreed to cut tariffs on Chinese goods from 145% to 30%, while China reduced duties on American imports from 125% to 10%.
“The agreement removed the risk of sudden re-escalation”, said principal research analyst at crypto platform Nansen, Aurelie Barthere, pointing to a significant rebound in risk appetite. That risk-on sentiment has helped fuel inflows into both traditional and digital assets, including Bitcoin.
In addition, the US and UK recently unveiled a limited trade deal titled the “Economic Prosperity Deal”, aimed at reducing both tariff and non-tariff barriers.
The agreement seeks to strengthen market access and foster bilateral economic ties, adding further momentum to global markets.
President Donald Trump’s shift in rhetoric has also been pivotal. Having previously rattled markets with aggressive trade measures, Trump has taken a more conciliatory tone in recent weeks, signalling willingness to pursue new agreements.
Analysts suggest this pivot has calmed investor nerves and encouraged capital rotation into risk assets.
Bitcoin’s resurgence is seen as part of this broader move, with many investors reallocating away from US dollar-linked instruments toward alternative assets like gold, Chinese equities, and increasingly, cryptocurrencies.
Institutional demand and ETF inflows build bullish case
The latest price milestone comes amid a surge in institutional demand, led by strong inflows into US-based Bitcoin exchange-traded funds (ETFs).
According to data from Farside Investors, Bitcoin ETFs have recorded consistent net inflows across five of the past six trading sessions. Notably, 19 May saw an inflow of $667.4 million, followed by another $329.2 million on 20 May.
One of the leading players behind this trend is BlackRock’s iShares Bitcoin Trust (IBIT), which has dominated ETF inflows since mid-April.
Analysts at Galaxy Digital noted that this kind of demand based on spot buying rather than leveraged speculation – is a key differentiator this time around.
The Head of Thematics at BlackRock, Jay Jacobs, remarked that global investors are increasingly seeking alternatives to the US dollar. “Countries are diversifying away from the dollar in favour of gold and now, Bitcoin”, he stated.
The market structure supports the bullish outlook. Bitcoin has held above the $100,000 level for nearly two weeks, signalling strong technical support. Recent daily closes around $106,500 marked the highest levels sustained by the asset in its history.
Adding fuel to the fire is the substantial pile of short positions clustered around the $107,000–$108,000 range. CoinGlass data shows around $1.2 billion worth of shorts are exposed in this zone.
As Bitcoin pushed through $109,000, over $110 million in short positions were liquidated — underscoring the risk of a further short squeeze.
If Bitcoin continues higher, analysts expect forced liquidations could extend the rally toward $115,000–$120,000.
According to the founder of MN Consultancy, Michaël van de Poppe, “The climax of uncertainty passed in early April. Since then, we’ve seen a robust and technically clean reversal”.
Even spot Ethereum ETFs are beginning to gain momentum, suggesting broader confidence in digital assets.
Though analysts caution that some profit-taking may occur, the current on-chain profit-to-loss ratio remains below the threshold considered overheated – at 99 compared to the red-flag level of 200.
From trade shock to Bitcoin breakout: A rapid rebound
Just weeks ago, the notion of Bitcoin breaking its previous all-time high seemed far-fetched. The price had plunged below $75,000 in early April after President Trump announced sweeping reciprocal tariffs.
At the time, global markets suffered significant losses, with the S&P 500 alone shedding more than $5 trillion in value – its steepest drop to date.
Bitcoin hit a year-to-date low of $74,434 on 7 April, reflecting the depth of market uncertainty. However, the situation began to shift following Trump’s so-called “Liberation Day” on 9 April.
Market participants interpreted his softened stance as a turning point, and Bitcoin quickly found its footing.
By 8 May, the cryptocurrency had surged past the psychologically important $100,000 barrier. Since then, it has maintained upward momentum, culminating in Wednesday’s record-breaking performance.
“There’s been a perfect storm of bullish catalysts”, said Jag Kooner, head of derivatives at Bitfinex. He pointed to geopolitical de-escalation, improved regulatory clarity, and macroeconomic tailwinds.
The recent ceasefire talks between Russia and Ukraine also played a role in lifting broader market sentiment.
Trump posted on X on 19 May that he and Russian President Vladimir Putin had agreed to “immediately start negotiations towards a Ceasefire and, more importantly, an END to the War”.
This announcement further boosted confidence and reduced the need for safe-haven hedges – prompting capital rotation into higher-risk assets like Bitcoin.
Kooner suggested that Bitcoin’s role is evolving. “Rather than acting solely as a hedge against fear, Bitcoin is now viewed as a high-conviction risk asset when macro conditions improve”, he said.
With Bitcoin Pizza Day on the horizon – celebrated annually on 22 May – traders are watching to see if momentum can carry the price above $110,000.
Key resistance lies just ahead at that level, followed by target zones between $115,000 and $120,000.
Support levels to monitor include $106,000 to $104,000, where recent consolidation occurred, and the strong psychological floor at $100,000.
A deeper fallback could test $96,000, which marked the top of the previous breakout structure in early May.
Although funding rates and open interest need to stay stable to sustain this uptrend, analysts say the ingredients for further gains are in place.
Some even predict a run toward $130,000 by the end of the year, driven by the increasing global money supply and the search for hard assets.
The Chief Crypto Analyst at Real Vision, Jamie Coutts, argued that as fiat currencies face growing debasement, investor demand for assets like Bitcoin will rise. He projected a potential price of over $132,000 before 2025 concludes.
One can say that Bitcoin’s climb past $109,000 reflects more than just a technical breakout. It signals a shift in global investor behaviour, increasingly shaped by changing geopolitical landscapes, policy decisions, and institutional positioning.
Whether this momentum can hold depends on the economic data ahead and the market’s ability to navigate the volatility that still lingers.
