Bitcoin broke the previous high of $109,860 set on January 20, 2025, and then reached a new high of $111,950. It has not broken a new high for ten trading days now. Bitcoin will again test lower levels and, after gaining support and undergoing repeated consolidation, will break out again. The consolidation range is approximately between $89,000 and $104,000.
The recent breakout trend of Bitcoin is very weak. It only broke the previous high by 2 points before starting to pull back. A normal strong breakout would see a rise of about 10 to 15 points after breaking the previous high, followed by a retest of the previous high of $109,000, before rising again.
This trend indicates that the capital in the crypto circle is very tight, with insufficient liquidity, and on the other hand, it shows that a large amount of profit-taking chips in the market are being sold. The crypto market must fully digest the selling pressure before it can rise again.
In the future, Bitcoin will siphon off liquidity from altcoins, and the cryptocurrency market will again see a bull market led by Bitcoin alone. It will take until Bitcoin's market cap accounts for over 70% for liquidity to reverse flow, leading to a bull market for altcoins.
Today's cryptocurrency market fear and greed index is 64, up from 56 yesterday, indicating a greedy market sentiment. The total global market cap of cryptocurrencies today is $3.24 trillion. The total market cap of Bitcoin is $2.08 trillion, accounting for 64.42%.
I also stopped my Bitcoin grid contract long position on the morning of May 30 when Bitcoin was at $105,992, and opened a short position on the Bitcoin grid contract on the morning of May 31 when Bitcoin was at $104,550.
The cryptocurrency market is all about probability. My statement about testing the bottom at $89,000 is merely based on past experiences and the most probable price level. In the crypto circle, only Bitcoin shows a stable and regular trend, because many institutions and countries around the world are reserving Bitcoin.
The current crypto market is not controlled by any institution regarding the price of Bitcoin. Recently, a giant whale in the U.S. dumped $1 billion in Bitcoin, and the crypto market withstood the whale's sell pressure. The price of Bitcoin only experienced a slight fluctuation. Previously, it was common for Bitcoin to experience fluctuations of 30% to 50% during a bull market.
Currently, Bitcoin has risen from $15,500 in November 2022 to a new high of $111,950 on January 20, 2025. Apart from the drop of more than 30% from the previous high of $109,860 on January 20, altcoins have faced even steeper declines. The normal state of Bitcoin's decline is to consolidate sideways, while altcoins are essentially halved. All of this is very favorable for making Bitcoin grid contracts.
The correlation between Bitcoin and 10-year government bonds has dropped to a historic low, indicating a significant decoupling. Bitcoin is increasingly seen as an independent asset, attracting institutional investors to shift from bonds to cryptocurrencies. The correlation between Bitcoin and U.S. 10-year government bonds has fallen to the lowest point in 14 years, reaching -0.53, marking a clear decoupling between these two assets. This phenomenon reflects that Bitcoin is gradually breaking away from the influence of traditional financial markets, becoming an independent asset class.
In contrast, the price trend of Bitcoin shows a strong negative correlation with government bonds. Data shows that over the past six months, the negative correlation between Bitcoin and 10-year government bonds has exceeded 90%, indicating that their performances in the market tend to be opposite. Investors may prefer to view Bitcoin as an alternative investment tool rather than a traditional safe-haven asset when facing macroeconomic uncertainties.
At the same time, more and more institutional investors are starting to incorporate it into their portfolios. Recently, Trump's media and technology group announced plans to raise $2.5 billion to establish a Bitcoin reserve, making Bitcoin one of the core assets of the company. Additionally, GameStop announced its first investment in Bitcoin, purchasing around $500 million worth of Bitcoin. Asset management giant BlackRock is also actively expanding its cryptocurrency business, planning to launch Bitcoin exchange-traded products in Europe to meet the growing demand for crypto assets from investors.
Despite a brief pullback in Bitcoin's price, the fundamentals remain bullish, with reserves on trading platforms continuously decreasing and corporate purchases continuing to pressure supply, while long-term holders keep accumulating, creating strong support below $90,000 for Bitcoin. The market in the coming weeks is expected to see Bitcoin's price consolidate between $89,000 and $104,000 until new driving factors emerge. Bitcoin is likely to face a deeper pullback soon. Current resistance mainly comes from profit-taking institutions, and leveraged profits are suppressing the bull market process.
Six months later, stories of wealth in the crypto circle will be widely circulated. People will have long forgotten how harsh the altcoin declines were, only remembering that betting everything on altcoins is a shortcut to wealth. At that time, the domino effect in the market will truly begin. The crypto market will either wait for the wind to come or be buried by the wind.