Bitcoin Breaks Out Above $107K
Bitcoin surged above $107,500 on Wednesday, reaching within 1.1% of its all-time high of $108,786. The lead cryptocurrency had now maintained above the $100,000 level for over 11 days and recorded its fourth-ever daily close at this level, peaking at a fresh weekly high of $106,500.
Following two weeks of consolidation between $102K and $105K, the leading cryptocurrency finally broke upwards, fueling a six-week rally of 40%.
Moody’s Downgrade Fuels Demand for Crypto
One of the key catalysts for Bitcoin’s recent surge was Moody’s downgrade of U.S. sovereign debt, which rattled investor confidence in traditional markets. As macro uncertainty accelerated, investors turned to Bitcoin as a store of value.
Easing geopolitical tensions between the U.S. and China have also restored risk appetite. Meanwhile, inflation is still gnawing at fiat currencies, and the Federal Reserve’s gradual rate-cutting path has kept real yields high—environmental conditions that are typically favorable to Bitcoin as an inflation hedge.
ETF Inflows Point to Strong Institutional Support
Institutional demand is also gaining traction. Spot Bitcoin ETFs experienced $329 million in net inflows on May 20, marking the fifth straight day of positive flows. Spot Ethereum ETFs experienced $64.9 million in inflows over three days.
CIFDAQ founder and chairman Himanshu Maradiya stated that the market remains in the consolidation phase but added that “growing institutional participation and regulatory openness” are behind crypto’s long-term outlook.
Analysts Track Important Levels, Caution Against Overheating Risks
YouHodler’s Ruslan Lienkha sees a strong accumulation trend and says near-term downside risk is limited unless there is a deterioration in general equity sentiment.
CryptoQuant’s Axel Adler noted no sign of excess euphoria yet, noting the holder profit/loss ratio is still away from the 200 level which signifies an overheated market.
However, with Bitcoin testing historical resistances today, analysts indicate that a breakout above $108,786 could bring new territory. A few trading sessions from now will tell.
