May 8, 2025 Bitcoin Price Dynamics: Soaring Close to $99,000

On May 8, Bitcoin showed strong performance, soaring to $98,800 at one point. Here are the core factors driving its price increase:

Policy Favorability Resonance

- China's Easing Policy: On May 7, the People's Bank of China announced a reduction in reserve requirements and interest rates to release liquidity to stimulate the economy, which led to a resurgence in market risk appetite, pushing Bitcoin up by 3% during the Asian trading hours.

- Federal Reserve Rate Cut Expectations: Federal Reserve Chairman Powell hinted at potential future rate cuts, with market expectations for an improved liquidity environment, benefiting Bitcoin along with traditional safe-haven asset gold.

Institution and Fund Movements

- ETF Continues to Attract Capital: BlackRock's IBIT Bitcoin ETF performed outstandingly, with a net inflow of $36.72 million in a single day, bringing total holdings to 597,000 BTC, significantly demonstrating the bottoming effect of institutional capital.

- Corporate Accumulation Wave: Japanese listed company Metaplanet announced an addition of 555 BTC to its holdings, bringing its total to 5,555 BTC, highlighting the corporate demand for Bitcoin allocation.

On-Chain Data Signals

- Realized Capital Hits New High: Bitcoin's realized capitalization broke through $88.9 billion, reflecting ongoing long-term capital inflows.

- Short-Term Holder Profit Recovery: Approximately 3 million BTC returned to a profitable state, with market sentiment shifting from “loss-dominated” to “profit-dominated.”

Risk Warnings and Market Outlook

The current Bitcoin price is close to the cost basis for short-term holders (around $95,000), and the market is extremely sensitive to price fluctuations. External variables such as details of Federal Reserve policies and Trump’s impending announcement of “major news from the Middle East” could trigger significant market volatility. Analysts generally believe that if Bitcoin breaks through the psychological barrier of $100,000, it could trigger FOMO sentiment, accelerating the price increase, targeting the range of $110,000 to $156,000. However, investors should be cautious of high leverage trading risks and the potential for a shift in macroeconomic policies.