Macro interpretation: The current crypto market is experiencing a complex situation interwoven by retail investors and major institutions. On one hand, traditional financial institutions are accelerating their layout of #BTC ETFs, promoting capital migration to crypto assets; on the other hand, global monetary policy adjustments and regulatory dynamics continue to influence market expectations. We will reveal the core driving forces behind Bitcoin's price and its potential market impact by integrating the latest industry trends with on-chain data analysis.
Institutional capital is entering the market at an accelerated pace, with Bitcoin ETF becoming a value anchor. The ETF fund flow data disclosed by BlackRock confirms the transformative change of Bitcoin as an institutional-level asset. Data shows that initial funding for Bitcoin ETFs primarily came from retail investors, but starting in the second quarter of 2024, top financial institutions, including Merrill Lynch, Morgan Stanley, Wells Fargo, and UBS Group, began systematic allocation, with a total asset management scale exceeding $10 trillion. Notably, the entry of traditional conservative institutional investors like the Texas Teacher Retirement System and Emory University marks that Bitcoin has surpassed the cognitive boundary of being a 'high-risk speculative product' and is gradually entering the mainstream asset allocation framework.
This trend resonates with on-chain data—Bitcoin's realized market capitalization broke the historical peak of $882.2 billion in late April, which is calculated by weighting the last on-chain transfer price of each Bitcoin, reflecting the 'real cost' of actual market investment. When realized market capitalization crosses key thresholds, it often triggers a reassessment of price support levels. Current data indicates that even if Bitcoin's price has not yet broken previous highs, the average cost for holders has built a solid base, highly similar to the characteristics observed in the early stages of the bull markets in 2017 and 2021.
Currently, the market is also facing regulatory games and liquidity reconstruction: the U.S. SEC's approval strategy for crypto ETFs shows significant differentiation. Bloomberg data indicates that the approval rate for mainstream crypto asset-related products continues to rise, with the approval probability for crypto index ETFs reaching 90%, while ETFs for competitive coins like Solana and XRP face stricter scrutiny. This regulatory stratification has objectively accelerated capital accumulation towards Bitcoin. By the end of April, Bitcoin ETF net inflows reached $4 billion, although lower than the same period last year, the holding structure has undergone a qualitative change: the proportion of long-term holdings by asset management giants like BlackRock has increased to 67%, up 21 percentage points compared to the same period last year.
It is worth noting that the Bank of Japan's monetary policy shift has unexpectedly catalyzed the crypto market. The tariff policy introduced by the Trump administration in early April forced Japan to postpone its interest rate hike plans, and the increasing pressure from yen depreciation has prompted local institutions to seek Bitcoin as a hedging tool. Historical data shows that whenever the yen to USD exchange rate falls below 150, the trading volume of Japanese cryptocurrency exchanges has averaged an increase of 38%. This cross-border capital flow is reshaping the crypto market landscape in the Asia-Pacific region.
The breakthrough of critical price points and the reset of market leverage are also worth our attention, as the technical aspects and derivative markets release strong signals. Coinank's liquidation heat map shows that if Bitcoin's price breaks above $96,000, it will trigger $1.168 billion in short liquidations, the largest potential short squeeze threshold since 2021. On-chain holding distribution indicates $97,530 has become a key battleground between bulls and bears, corresponding to the holding cost line of 462,000 Bitcoins accumulated near the historical peak in November 2021. If broken, the market may enter a resistance-free zone.
The new high in realized market capitalization and the divergence from futures funding rates reveal the uniqueness of the current market. Although Bitcoin's price has not yet broken previous highs, the continuous increase in realized market capitalization indicates that new funds are digesting early profit-taking positions. This 'slow bull' accumulation differs from the previous leverage-driven surge models. Options data shows that the maximum pain points for Bitcoin options expiring in May are concentrated in the $92,000 to $95,000 range. If prices stabilize above this area, it may trigger a revaluation of options contracts worth up to $3.4 billion.
The trust crisis in the traditional financial system has spawned alternative solutions. Eric Trump, Vice President of the Trump Organization, sharply criticized the traditional financial system at the Dubai Crypto Summit, reflecting the systemic challenges faced by it. His critique of the inefficiency of the SWIFT system and unequal banking services resonates with BlackRock's research report—global average costs for cross-border remittances still reached 6.2% in Q1 2024, while blockchain solutions can compress this number to below 1%. This efficiency gap is driving more institutions to explore crypto infrastructure; a recent Fidelity survey shows that 83% of institutional investors list 'reducing trading friction' as the primary motivation for allocating cryptocurrencies.
The market evolution path is gradually becoming clear. Bitcoin, with its censorship resistance and fixed supply mechanism, has become a strategic reserve for institutions to cope with monetary overissuance; Ethereum and Layer 2 ecosystems cater to the innovation demands of smart contracts; and high-performance chains like Solana focus on vertical scenarios like payment and settlement. This value stratification gives the 'digital gold' narrative of Bitcoin stronger fundamental support. Grayscale's research report estimates that if the U.S. M2 money supply maintains an annual growth rate of 4.3%, Bitcoin's market capitalization share is expected to exceed 50% by 2025.
The investment logic under structural changes also needs to be transformed. The essential difference between the current market and previous cycles lies in the qualitative change in the participant structure. When the proportion of long-term capital holders such as hedge funds, university endowments, and sovereign wealth funds exceeds 35%, Bitcoin's price volatility shows a convergence trend. The average 30-day volatility of Bitcoin in 2024 is 42%, down 19 percentage points from the 2021 bull market period, and this stability, in turn, attracts more conservative funds to enter.
For the subsequent market trends, two major catalysts need to be emphasized: First, the timing of the Federal Reserve's policy shift and the combined effect of Bitcoin ETF options products. The Chicago Mercantile Exchange plans to launch Bitcoin ETF options, which could bring an additional $15 billion in liquidity; second, the dynamic relationship between miners' holding costs and spot prices after Bitcoin halving. When prices remain above 2.5 times the cost line, it historically accompanies a relaxation in hash rate competition and miners holding back selling. If the above conditions resonate, Bitcoin is expected to test new highs in the future, opening a new era for crypto assets as macro hedging tools. However, without significant positive news, a deep correction is likely to follow.
BTC data analysis:
According to Coinank data, Bitcoin's price is currently facing a critical liquidity threshold area of $94,000 to $96,000. On-chain liquidation heat maps show that breaking above $96,000 will trigger about $1.17 billion in short position liquidations, while dropping below $94,000 will lead to a $450 million level of long liquidation wave. This data essentially reflects the distribution of market fragility—short liquidation intensity is 2.6 times that of longs, exposing the current asymmetric risk exposure of leveraged funds at resistance levels. Derivative structures show that the main liquidation pressure is concentrated on Binance (58%) and OKX (23%), with the central cost of short positions concentrated in the $95,500 to $96,500 range.
Such liquidation-dense zones often create a price magnet effect: if a key level is broken, the buying pressure caused by short covering will self-reinforce the price trend, forming a 'liquidation-driven bull market'; conversely, it may trigger a long squeeze. Currently, Bitcoin's volatility surface shows extreme distortion, with call option premiums rising 47% above $96,000, indicating that market makers have anticipated a breakout. For the crypto ecosystem, this high elasticity structure may accelerate market style switching—if successfully broken, mid-to-small-cap tokens may welcome a rebound window; if blocked and retracing, institutions may turn to volatility arbitrage strategies, driving the demand for Bitcoin ETF inverse shorting tools to surge. Historical data shows that after similar liquidation intensity thresholds are triggered, the volatility center rises an average of 62% within 72 hours, suggesting a focus on cross-exchange arbitrage opportunities and stablecoin market cap fluctuations.
