Bitcoin Holds Above $100,000 as Volatility Drops 63.6%

Bitcoin's price has been holding steady above $100,000, driven by a "risk-on" sentiment following the decline of the CBOE Volatility Index (VIX) to 20, its 30-year average. This drop in volatility comes after a significant US-China trade deal on May 12, which introduced a 90-day tariff pause and a 115% reduction on both sides. The agreement has boosted investor confidence, leading to increased interest in higher-risk assets like Bitcoin and equities. According to Bitcoin network economist Timothy Peterson, the drop in the VIX to 'normal' levels indicates a favorable environment for riskier investments.

The recent US Consumer Price Index (CPI) inflation rate drop to 2.3% year-over-year in April 2025, the lowest since February 2021, further supports this bullish sentiment. This softer-than-expected CPI reading suggests easing inflationary pressure, potentially increasing the likelihood of Federal Reserve interest rate cuts in 2025. The combination of lower volatility, cooling inflation, and a trade war truce creates favorable market conditions for Bitcoin.

Earlier this month, Peterson noted that Bitcoin could reach $135,000 within 100 days, according to the analyst's forecast. This prediction is based on a drop in the CBOE Volatility Index (VIX) from 55 to 25, signaling a "risk-on" environment. Peterson's model, with 95% accuracy, links low VIX levels to increased investor confidence in riskier assets like Bitcoin.

Adding to the bullish sentiment, the Bitcoin Bull Score Index has surged to 80, its highest reading in 2025. This dramatic rise, driven by increasing spot demand outpacing supply, reflects patterns observed after the April 2024 halving. Historically, this level has been associated with significant price surges, suggesting that Bitcoin could be poised for further gains.

Bitcoin researcher Axel Adler Jr. also noted that while the Bitcoin Fear & Greed Index is climbing, currently at 53.3%, it remains below the "overloaded" zone above 80%. Adler Jr. discussed the possibility of a market “upswing,” expressing hope for a successful test and surpassing Bitcoin’s all-time high near $110,000. This growing optimism, coupled with historical patterns, indicates potential for further price gains in the near future.