As traditional financial markets fluctuate,#Bitcoinonce again proves its unique market position.
According to Coinmarketcap data, during the U.S. stock trading session on May 21, the price of Bitcoin soared to a record high of $109,767.52, and its market value once exceeded $2.16 trillion, surpassing Amazon to become the world's fifth most valuable asset. As of the time of writing, the BTC trading price has fallen back to around $108,000, a 24-hour increase of 1.8%.
As market sentiment is high, bull Michael Saylor bluntly said: "If you don't buy Bitcoin at its historical high, you're missing out."
A time bomb in traditional markets?
On the same day, the U.S. Treasury market seemed to be experiencing a "crisis."
After the results of the weak demand for the US 20-year Treasury auction were released, US stocks, bonds and currencies fell sharply. Deutsche Bank analyst George Saravelos regarded the market's reaction as a clear signal of "foreign buyers' collective avoidance of US debt assets." The 10-year US Treasury yield rose to 4.607% at one point, the highest level since February 13, and the US dollar index fell 0.5%.
"This is a hidden time bomb," warned Josh Mandell, a former fixed income expert and current Bitcoin analyst. He explained: "In the past, we used to say that if the 30-year Treasury bond failed to sell, it would be a disaster... If the Fed hadn't intervened, we might have faced the risk of default due to the failure of the bond rollover."
This warning was quickly verified in the stock market, with the Nasdaq index plummeting 1.5% in an hour and the S&P 500 index falling 1.3%. This drastic market volatility explains why more and more funds are pouring into the Bitcoin market.
Well-known market analyst Benjamin Cowen mentioned in his podcast that during the Bitcoin bear markets in 2014, 2018 and 2022, bond yields rose when other risky assets fell. This situation led to increased government borrowing costs and had a chain reaction in various sectors of the economy, such as mortgages and corporate financing.
From 2015 to 2025, although the market often magnifies the correlation between Bitcoin and the macroeconomy, its own market logic and cyclical laws are sometimes more critical. Therefore, the correlation between Bitcoin and bond yields will be stronger or weaker depending on the environment.
Now, in May 2025, this correlation has fallen to its lowest level in history - Bitcoin is still performing strongly in an environment of high yields. This "abnormal" trend suggests that investors may be re-allocating assets.
As of the close of U.S. stocks on Wednesday, the Dow fell 1.69%, the S&P 500 fell 1.16%, and the small-cap index plummeted 2.35%. These declines, coupled with rising bond yields, show that funds are fleeing traditional assets.
$110,000: The key battlefield for the long-short decisive battle
In this context, every key price of Bitcoin becomes particularly important. Well-known crypto trader Skew pointed out on the X platform that $110,000 has become a key battlefield in the current market structure. According to his analysis, a large number of sell orders have gathered near this price, and the order book of Binance perpetual contracts shows that there are significantly more sell orders than buy orders, and short positions are accumulating.
“All of this suggests there is tremendous liquidity here, which is generally critical to markets,” Skew explained.
This observation coincides with Kretov's view that "structurally, there is room for explosive gains, but a sharp correction could occur at any time."
Drilling down into the market data reveals even more details. Bitcoin’s 24-hour trading volume surged 34.67% to $66.9 billion, indicating a significant increase in market activity. More notably, open interest in the futures market increased by 11.18% to a total of $79.84 billion, indicating that a large amount of funds are betting on Bitcoin's subsequent trend.
However, one phenomenon that deserves attention is the participation of retail investors.
According to CryptoQuant, when Bitcoin was close to its all-time high, retail investors (defined as wallets with a single transaction of $0-10,000) only accounted for 3.2% of the total volume. This is in stark contrast to 30% in December 2024. This difference may mean that the current rise is mainly driven by institutional funds, while retail investors are either holding on to their coins or have already left.
Polymarket contract data shows that the probability of Bitcoin breaking through $110,000 by the end of May is as high as 79%. The probability of reaching $115,000 and $125,000 by the end of May is 37% and 5% respectively. As for the possibility of breaking through $150,000 or $200,000, traders currently give an assessment of only about 1%, reflecting that the market is still cautious about higher prices.
Digital gold at a crossroads
Faced with such a complex market environment, Bitcoin seems to be standing at a critical crossroads. On the one hand, the turmoil in the traditional financial market continues to drive funds into the cryptocurrency field; on the other hand, the decline in retail liquidity and the pressure of key resistance levels bring uncertainty to the rise.
Based on the "power law curve" model, the well-known anonymous analyst apsk32 believes that Bitcoin may reach $200,000 in 2025. This prediction is supported by some technical indicators, such as the recent convergence of the Sharpe ratio of Bitcoin and gold. Jurrien Timmer, global macro director of Fidelity Investments, even suggested that investors can allocate gold to Bitcoin at a ratio of 4:1.
Historical data shows that the second quarter has always been Bitcoin's "seasonal uptrend": so far, this quarter's 28% increase has made it the fifth best quarterly performance since 2013. If this wave of growth continues into June, this pattern will be verified again.
