As Asian market trading opened on Thursday (July 20), Bitcoin firmly stood above $110,000 after breaking a historical high the previous day, with some analysts believing that Nvidia's historic market value surpassing $4 trillion served as a catalyst for this Bitcoin breakout. However, some analysts suggest that if trade tensions escalate, this rally may come to a halt.
Bitcoin set a new high on Wednesday, breaking through the $112,000 mark, after having repeatedly failed to effectively break the $110,000 level in the past few days. Meanwhile, major altcoins also surged. Ethereum rose over 5% within 24 hours, and XRP and Solana also increased by over 3% respectively.
As of now, Bitcoin has increased by about 20% this year, after briefly dipping below $100,000 at the end of June. Bitcoin's previous historical high occurred in May, but after briefly breaking through $112,000 on Wednesday, it quickly fell back and is currently hovering around $111,000.
Within minutes before and after reaching a new high, investors liquidated over $280 million in short positions within an hour, driving prices sharply upward. Data provider CoinGlass stated that this was a strong breakout in the consolidation pattern seen in recent weeks.
According to Coinglass data, within approximately 4 hours before and after Bitcoin reached its historical high, the liquidation amount involving Bitcoin shorts across major exchanges approached $340 million.
Some industry experts predict that in the second half of 2025, more companies will continue to incorporate Bitcoin as a reserve asset on their balance sheets. Meanwhile, many Bitcoin holders still hope that the U.S. government will establish a 'strategic Bitcoin reserve' before the end of the year, although according to Polymarket data, this possibility has been deemed to have significantly decreased this year.
Driven by Bitcoin's rise, cryptocurrency exchanges Coinbase Global and 'Bitcoin Treasury' company MicroStrategy both saw their stock prices rise by about 5% on the same day. On Wednesday, the overall U.S. stock market rose, with the tech-heavy Nasdaq Composite Index also closing at a historical high.
Nvidia's market value surpassing $4 trillion serves as a catalyst.
Nvidia's market value has historically surpassed the $4 trillion mark, becoming the first company to reach this milestone, an event that may catalyze Bitcoin's breakout from its consolidation range and challenge historical highs.
According to CoinDesk market data, after briefly breaking the historical high during the U.S. trading session, Bitcoin is currently trading around $110,900, having once risen to $111,230 during the day.
Although institutions generally accept the narrative of Bitcoin as 'digital gold', it remains a risk asset that depends on factors driving investor sentiment, fluctuating with the ups and downs of the stock market. When the market is in a risk-on mode, and investors purchase growth assets like tech stocks, Bitcoin and cryptocurrencies often rise accordingly.
Glassnode analysts pointed out that the recent cooling of on-chain Bitcoin transactions, low miner income, and weak transaction fees do not indicate market weakness, but rather reflect an increase in market maturity, with current trading mainly dominated by large institutional trades and cautious long-term holders.
Although the correlation between Bitcoin and Nvidia was as high as 0.80 during the AI boom at the beginning of 2024, with a three-month average maintaining at 0.69, the latest data shows this correlation has dropped to 0.36, indicating that the two may be 'decoupling'. Analysts point out that even if Nvidia's stock price corrects in the future, Bitcoin's price may still show resilience.
However, analysts also believe that Nvidia's stock price milestone has obviously provided a 'trigger point' for Bitcoin to break its long-standing price stagnation.
Could Bitcoin reach $120,000 or even higher?
Previously, Bitcoin prices had lingered in the $106,000 to $110,000 range for several weeks due to investor concerns over trade tariffs, the Federal Reserve's continued hawkish interest rate policy, and global macro uncertainty.
Strahinja Savic, head of data analytics at FRNT Financial, wrote in comments sent to Decrypt, "The stars seem to have aligned for Bitcoin."
He stated that investors view Bitcoin as a hedge against the uncertainties of fiat currency systems, especially in the current global macro situation, making it more attractive. "For Bitcoin supporters, this is precisely why they initially bought it. In the U.S., people are increasingly aware that the fiscal situation is unsustainable and lacks reform capability."
Savic added, "Looking beyond the U.S., from the Russia-Ukraine conflict to tensions in the Middle East, there are countless geopolitical and macro risks. In this context, a scarce, peer-to-peer, and government-controlled digital asset is naturally favored by investors. Bitcoin's price is chasing its emerging status as a global safe-haven asset."
"With the upcoming Crypto Week in Washington next week, along with the potential for significant positive momentum entering the summer's dog days, bullish sentiment and reduced trading volume could see price gaps reach $120,000 or higher by next weekend," said Ryan Gorman, Chief Strategy Officer of Uranium Digital. "We cannot predict how much we will rebound throughout the summer, but the interest in unexercised call options exceeds that of put options, which typically indicates traders are bullish and expect price momentum to continue."
According to the views of Juan Leon, a senior investment analyst at Bitwise Asset Management, Bitcoin has been in an 'accumulation phase' since its last historical high, with 'retail investors selling chips to institutional investors, and this transfer seems to be nearing its end. At the same time, the market's expectations for a Federal Reserve rate cut are heating up, which is also boosting Bitcoin's risk appetite.'
However, ARK Invest pointed out in its latest report that while Bitcoin prices remain stable, on-chain momentum is weakening. If prices cannot continue to rise, market sentiment may turn negative. Data shows that Bitcoin's MVRV (Market Value to Realized Value ratio) is currently close to the two-year moving average, significantly below the optimistic levels that dominated the market for most of 2024 and 2025.
