Will Bitcoin reach a new high within the next week?
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Will Bitcoin reach a new high within the next week?
Be cautious of volatility from overbought pressure, macro risks, and potential derivatives leverage liquidations.
Navigating Web3 tides with focused insightsAuthor: Lawrence, Mars Finance
1. Current Market Landscape: Violent Breakout Amid Liquidity Waterfall and Short Squeezes
BTC/USD pair broke $100,000 for the first time since February 4.
On May 9, 2025, Bitcoin (BTC) surged by 4.3% in a single day, breaking above $104,000 and reclaiming the six-figure level for the first time since February.
This breakout not only ignited market sentiment but also triggered the largest short squeeze since 2021—over $825 million in short positions were forcibly liquidated within 24 hours, with Bitcoin accounting for $730 million of that amount.
From a technical perspective, Bitcoin's weekly chart has formed a classic "bull flag" pattern: after breaking above the upper trendline at $88,000 on April 22, prices entered an acceleration channel. If the pattern completes fully, the theoretical target could reach $182,200—representing 75% upside from current levels. On the daily chart, MACD continues to diverge above the signal line, while 5-day, 10-day, and 20-day moving averages are arranged in bullish alignment, with short-term support now shifted up to $102,500.
However, risks remain. The daily RSI (Relative Strength Index) has risen into overbought territory above 70, and weekly momentum remains weaker than its peak level in December 2024.
This suggests that price may face technical pullback pressure following the breakout; however, as long as key support holds, any correction could serve as a springboard for renewed upward movement.
2. Key Drivers for the Coming Week: Fourfold Catalysts Converging
1. Macroeconomic Policy Tailwinds: Rate Cut Expectations and Sovereign Capital Inflows
Fed pivot signals strengthen: Although the May 8 FOMC meeting held rates steady, Powell hinted at a potential early rate cut, pushing market expectations for a July rate cut to 68%. Historical data shows Bitcoin’s average gain during initial phases of rate-cut cycles reaches 142% (see 2019 and 2023).
Sovereign capital allocation wave: New Hampshire passed a strategic Bitcoin reserve bill, while Texas is advancing similar legislation toward final voting. Japan’s Metaplanet increased BTC holdings to 5,555 coins via bond issuance, and MicroStrategy’s “42/42 Plan” aims to raise $84 billion for continuous BTC purchases. Such sovereign-grade demand is reshaping Bitcoin’s valuation framework.
2. Institutional Capital Influx: ETFs and Derivatives Market Synergy
Cash ETF capital suction effect: Bitcoin ETFs recorded net inflows of $5.3 billion over the past three weeks, with a record single-day inflow of $890 million on May 9. BlackRock’s IBIT ETF now holds 5% of circulating supply, and its recent investment in competing ETFs (e.g., Fidelity’s FBTC) signals intensifying institutional positioning.
Options market speculation heats up: Coinbase call option open interest surged 300%, with contracts having strike prices between $120,000–$150,000 making up over 40%. Leverage in derivatives markets could further amplify spot price gains.
3. Technical Upgrades and Ecosystem Expansion
Bitcoin network maturity improves: Lightning Network node count surpassed 80,000, weekly active on-chain addresses rose 12%, and transaction fees dropped below $0.50. The MVRV (Market Value to Realized Value) ratio has returned to a healthy range of 2.5–3, indicating the market hasn’t yet entered excessive speculation.
Ethereum Pectra upgrade spillover effects: Launched on May 7, the upgrade introduced EIP-7702 (Account Abstraction) and EIP-7251 (increasing validator staking cap to 2,048 ETH), directly reducing DeFi protocol gas costs by more than 30%. After Ethereum broke above $2,200, capital rotation back into the ecosystem may help Bitcoin overcome liquidity bottlenecks.
4. Market Sentiment and Positioning Structure
Short covering pressure: Shorts still account for 62% of outstanding Bitcoin futures contracts, with $2.85 billion worth of sell orders stacked above $109,500. A break above the previous high of $109,225 could trigger cascading short liquidations.
Retail FOMO lags: On-chain data shows concentration of holdings in the 93k–98k range totaling 1.17 million BTC, yet stablecoin balances on exchanges continue to decline, suggesting retail investors have not yet entered en masse. This “institution-led + retail-waiting” structure actually reduces near-term selling pressure.
3. Key Resistance Levels and Breakout Paths: The Battle from $104,000 to $150,000
1. Near-Term Resistance Zones (Next Week)
First Threshold: $106,500
According to Fibonacci extension models, the $106,000–$106,500 zone represents the 1.618 retracement of the December 2024 downtrend. A confirmed breakout would open room for further advance toward $116,891.
Historical High: $109,225
The January peak at $109,225 serves as both psychological and technical resistance. Standard Chartered analysts believe holding above this level confirms the start of the second phase of the bull market, targeting $120,000.
2. Medium-Term Target: Bull Flag Pattern and Cycle Trends
Weekly Bull Flag Target: $147,225
Per measurement rules, the breakout height of a bull flag typically equals the flagpole length (from October 2024 low of $50,000 to January 2025 high of $109,225). If the pattern holds, the target becomes 88,000 + (109,225 – 50,000) ≈ $147,225.
Halving cycle pattern: Historically, 500 days after the third halving, Bitcoin has gained tens of times in value, with diminishing returns each cycle. Given the latest halving occurred in April 2024, reaching the 400-day mark under this pattern implies a price target of $150,000.
3. Extreme Scenario: Is the "$1 Million Narrative" Possible?
CZ Zhao, founder of Binance, proposed a "$500,000–$1 million" target based on the following assumptions:
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The U.S. Treasury allocates 1% of foreign exchange reserves (~$40 billion) to Bitcoin;
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A Trump administration pushes for Bitcoin to be recognized as legal tender equivalent;
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Global sovereign wealth funds increase Bitcoin allocation to 0.5%.
While highly speculative, MicroStrategy’s aggressive accumulation (holding 180% of company market cap in BTC) already provides a blueprint for the "corporate balance sheet revolution."
4. Risk Warnings: Three Potential Reversal Signals
1. Macroeconomic Black Swans
If the Fed delays rate cuts or inflation data exceeds expectations (e.g., CPI release on May 15 showing YoY inflation above 4.5%), risk assets could broadly decline. Bitcoin’s 30-day correlation with the S&P 500 has risen to 0.72, warranting caution against synchronized drawdowns.
2. On-Chain Holding Shifts
Long-term holders (LTH) have already sold 500,000 BTC above $100,000, and miner wallet balances have dropped to their lowest since 2020. Concentrated outflows from whale addresses to exchanges could signal a near-term top.
3. Derivatives Leverage Liquidation Chain
Current market-wide leverage (open interest / market cap) stands at 18%, nearing November 2021 levels. A sharp drop below the $93,780 support could trigger forced liquidations of up to $6 billion in long positions.
Conclusion: New Highs Ahead, But Beware Volatility Amplifiers
Considering technicals, capital flows, and sentiment, Bitcoin has over a 70% chance of surpassing its historical high of $109,225 in the coming week. Key catalysts include:
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Daily net inflow into spot Bitcoin ETFs exceeding $1 billion;
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Trump releasing details of crypto-friendly policies;
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Ethereum breaking above $2,500, triggering cross-market capital rotation.
For investors, the following strategies are recommended:
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Short-term traders: Gradually build positions in the $102,500–$103,000 range, add exposure upon breaking $109,225, and set stop-loss at the psychological $100,000 level.
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Long-term holders: Use pullbacks to the $93,780–$96,000 support zone to accumulate spot holdings, avoiding high-leverage plays.
In a bull market, overbought can become more overbought; in a bear market, oversold can go deeper. Under this new liquidity-driven paradigm, Bitcoin is evolving from “digital gold” to “sovereign-grade reserve asset”—and this epic rally may have only just begun.
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