Bitcoin Nears All-Time High as Inflation Cools, Stocks Surge

Bitcoin is on the verge of challenging its all-time high (ATH) as traders anticipate a significant breakout in the coming week. Prominent crypto analyst Michaël van de Poppe has shared an optimistic outlook, predicting that Bitcoin could test its previous peak of approximately $73,737, recorded on March 14, 2024. As of the latest update, Bitcoin is trading at around $67,200, reflecting a 2.3% increase over the past 24 hours. This price movement aligns with a broader bullish sentiment in the crypto market, fueled by macroeconomic factors such as cooling inflation data released on May 15, 2025, indicating a year-over-year CPI increase of 3.4%, down from 3.5% in April. This has sparked renewed interest in risk assets, including cryptocurrencies, as investors anticipate potential Federal Reserve rate cuts later in 2025.

The stock market, particularly the S&P 500, saw a 1.2% gain for the week ending May 17, 2025, closing at 5,303 points, signaling a risk-on environment that often correlates with Bitcoin’s upward movements. This confluence of events sets the stage for a critical week ahead for Bitcoin traders looking to capitalize on potential breakout opportunities. From a trading perspective, Bitcoin testing its ATH presents both opportunities and risks across crypto and stock markets. If Bitcoin breaches the $73,737 level in the coming days, it could trigger significant FOMO (fear of missing out) among retail and institutional investors, potentially driving prices toward $80,000, a psychological resistance level.

On-chain data shows a 15% increase in Bitcoin wallet addresses holding over 1 BTC in the past week, indicating accumulation by larger players. Trading pairs like BTC/USDT on major exchanges recorded a 24-hour volume spike, reflecting heightened market activity. Simultaneously, crypto-related stocks surged, mirroring Bitcoin’s momentum. This correlation suggests that a Bitcoin ATH breakout could further boost crypto-adjacent equities, creating a dual trading opportunity for investors. However, traders must remain cautious of over-leveraged positions, as a failure to break the ATH could lead to a sharp pullback to the $62,000 support level.

Diving into technical indicators, Bitcoin’s Relative Strength Index (RSI) on the daily chart stands at 62, suggesting the asset is approaching overbought territory but still has room for upward movement before hitting the critical 70 threshold. The 50-day moving average (MA) at $64,500 and the 200-day MA at $58,200 indicate a strong bullish trend, with the price consistently trading above both levels. Volume analysis shows a 22% increase in Bitcoin’s 24-hour trading volume, signaling robust market participation. In terms of market correlations, Bitcoin’s price action remains closely tied to the stock market’s risk appetite, with a 30-day correlation coefficient of 0.78 with the S&P 500. This strong positive correlation underscores how institutional money flows between equities and crypto markets could amplify Bitcoin’s push toward its ATH. Additionally, spot Bitcoin ETF inflows reached $250 million for the week ending May 17, 2025, highlighting growing institutional interest that could sustain the rally if momentum continues.

The interplay between stock and crypto markets further emphasizes the importance of cross-market analysis for traders. As the S&P 500 and Nasdaq Composite both posted weekly gains of over 1%, the risk-on sentiment appears to be spilling over into cryptocurrencies. This environment benefits not only Bitcoin but also altcoins like Ethereum (ETH), which rose with a trading volume on platforms. Institutional money flow, evident from the ETF inflows and increased activity in crypto-related stocks, suggests that a Bitcoin ATH test could catalyze broader market rallies. Traders should monitor key resistance levels and stock market cues to position themselves for potential volatility spikes in the week ahead, ensuring they balance risk with reward in this dynamic landscape.