Bitcoin climbed above $107,500 on Wednesday, just 1.1% shy of its all-time high of $108,786 as investors seek refuge from global uncertainty.
The flagship crypto has broken out of a two-week consolidation between $102,000 and $105,000 to reach fresh highs.
Over the past six weeks, Bitcoin has rallied roughly 40%, and held above $100,000 for more than 11 days. Moreover, only four trading sessions in history have recorded a daily close above the current level, and last week’s close at $106,500 marked a new record.
Moody’s Debt Downgrade Sparks Flight to Crypto
Bitcoin’s surge has been propelled by a confluence of macroeconomic and geopolitical factors.
Moody’s downgrade of US debt rattled confidence in traditional financial systems, while cooling trade war tensions between the US and China fostered risk-on sentiment.
Meanwhile, persistent inflation has eroded fiat purchasing power, and the Federal Reserve’s cautious pace of rate cuts kept real yields elevated, dynamics that have boosted demand for Bitcoin as a hedge.
Analysts Eye ETF Flows as Momentum Driver
Spot Bitcoin ETFs have drawn substantial capital amid this backdrop. On May 20, they recorded a net inflow of $329m, marking a fifth straight day of positive flows. Spot Ethereum ETFs also saw $64.9m in net inflows for a third consecutive day.
Every strong price acceleration that rapidly shifts large volumes of coins from loss into profit pushes the 30-day SMA of the UTXO profit-to-loss ratio above 200. The higher the spike, the closer the market moves toward an overheating and/or distribution phase.
Today, the metric… pic.twitter.com/t9MoHFaMHr
— Axel
Adler Jr (@AxelAdlerJr) May 21, 2025
Adler Jr (@AxelAdlerJr) Himanshu Maradiya, founder and chairman at CIFDAQ, said the market remains in a consolidation phase with repeated tests of $106,000.
He added “this fresh regulatory openness, combined with rising institutional participation, continues to position crypto for long-term growth despite short-term range-bound price action.”
Ruslan Lienkha, head of markets at YouHodler, noted a clear accumulation trend. He said:
“While the risk of a downside correction cannot be ruled out, particularly if negative sentiment returns to the equity markets, the likelihood of such a scenario remains relatively low in the short to medium term.”
CryptoQuant analyst Axel Adler said that if the 30-day moving average of the ratio between holders’ profits and losses on coins that have moved climbs above 200, it signals an overheated market. He noted the current reading is 99, so there’s no sign of excessive euphoria yet.
With Bitcoin now flirting with its previous peak, market watchers say the next few trading days will be critical. If bulls sustain above $107,000 and clear $108,786, a test of fresh highs appears increasingly likely.
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