Bitcoin Surges 2% to $110,700 as US Financial Conditions Loosen

Bitcoin (BTC) demonstrated resilience on May 27, briefly reaching $110,700 following a robust opening in the US equities market and the announcement by the Trump Media and Technology Group that it would raise $2.5 billion for a Bitcoin treasury. This bullish momentum aligns with favorable US financial conditions, as highlighted by Ecoinometrics. The macroeconomic-focused Bitcoin newsletter noted that the National Financial Conditions Index (NFCI) has shifted rapidly to ultra-loose territory after a tightening phase in February 2025. The NFCI, published by the Federal Reserve Bank of Chicago, aggregates measures such as credit spreads, leverage, and funding conditions to track stress in the financial system. When the index moves into looser territory, it indicates easier access to capital and reduced market stress, conditions that typically encourage risk-taking behavior among investors.

For high-beta assets like Bitcoin, such periods often coincide with price rallies as capital flows into speculative markets. Ecoinometrics mentioned that within four weeks, liquidity has returned, creating a supportive macroeconomic environment for risk assets like Bitcoin. The newsletter noted, “That’s the kind of macro backdrop where Bitcoin thrives. Bitcoin’s rally to new highs didn’t come out of nowhere. It’s tracking the same pattern we saw since 2023: easing conditions → capital rotation → risk-on.”

With Bitcoin just 2% away from its all-time high price, data from CoinGlass indicates that the probability of a short-squeeze remains high due to significant sell-side liquidity. If Bitcoin breaches $115,000, over $7 billion in short positions could get liquidated, triggering a cascading effect that pushes prices higher. This scenario could turn Bitcoin's trajectory parabolic, liquidating more than $7 billion in short positions and potentially driving prices even higher.

Onchain data shows that Bitcoin is in an ‘overheated zone,’ suggesting prolonged profit-taking from BTC investors. Two key onchain indicators—Supply in Profit Market Bands and the Advanced Net UTXO Supply Ratio—are flashing signals consistent with prior market tops. The Supply in Profit Market Bands metric tracks how much of the circulating BTC supply is currently in profit. As of late May 2025, this figure has surged to 19.4 million BTC, nearing historical extremes and entering the “Overheated Zone.” Previously, BTC prices tested this zone on Dec. 17, 2025, which was followed by a price correction to $93,000 from $107,000.

Simultaneously, the Advanced Net UTXO Supply Ratio (NUSR), which compares profitable versus unprofitable UTXOs (unspent transaction outputs), is brushing against its historical ceiling around 0.95—a level frequently preceding sell signals. Red markers on the chart indicate prior instances when such conditions led to local price tops or prolonged consolidations. While the overall momentum remains bullish, these onchain indicators suggest a high probability of increased volatility and profit-taking in the short-term. This data does not guarantee an immediate drop, but it indicates a potential for heightened market activity and investor caution.