Bitcoin Surges 39% in a Month, Crosses $105,000 Mark

Bitcoin's price has maintained a strong bullish momentum, with many traders anticipating new all-time highs. In just one month, Bitcoin surged by 39%, briefly crossing the $105,000 mark. According to Glassnode analysts, the market is showing signs of renewed strength and is trading within a profit-dominated regime. This optimism has led to a significant shift, with over 3 million BTC returning to a profitable state. Capital inflows have exceeded $1 billion per day, indicating strong demand and a market willing to absorb selling pressure. Even short-term holders who were underwater since the December 2024 peak have seen their portfolios turn green.

However, not all investors are convinced that the rally will continue unabated. Some are already taking profits, pushing Bitcoin’s realized cap to an all-time high of $889 billion. More profit-taking is expected at the $106,000 level. Historically, euphoric market sentiment has often led to periods of consolidation or sharp corrections. This risk may be growing, particularly as gold, whose price action Bitcoin has closely mirrored in recent months, is showing signs of fatigue and could be heading for a correction itself.

Institutional investor confidence is also rebounding. Over the past three weeks, more than $5.7 billion has flowed into Bitcoin ETFs. The total assets under management held within the US spot ETFs have now climbed to over 1.26 million BTC, a new all-time high. This relief, both financial and psychological, is already translating into spending behavior. The net difference between short-term holders’ transfer volume in profit versus at a loss has swung sharply to +20%—a notable reversal from the -20% seen during the capitulation phase at the end of April.

Despite the optimism, there are signs that the market may be overheating. BTC’s open interest has climbed to $68 billion, near all-time highs, indicating a heavily positioned market. In such conditions, even a small catalyst could spark an outsized move—up or down. André Dragosch, head of research at Bitwise Asset Management, warned that Bitcoin might be getting a bit ahead of itself. He posted Bitwise’s in-house Cryptoasset Sentiment Index, which has reached its highest level since November 2024. The index, which includes 15 sub-indicators spanning sentiment, flows, onchain data, and derivatives, now shows an overheated market.

Dragosch noted that the latest readings imply that market sentiment has become overheated and that positioning appears to be one-sided on the long side. This tends to signal an increased risk for a temporary pull-back in the price of Bitcoin, and that the current rally could take a break. However, Dragosch remains “structurally constructive” until the end of 2025, citing the continued BTC accumulation by corporations and ETPs, which continues to deplete Bitcoin on-exchange balances.

Several risks could challenge Bitcoin in the short term. Renewed regulatory uncertainty is a top concern, particularly after the Senate stalled stablecoin legislation. Broader shifts in market behavior may also be at play. Since March 2025, Bitcoin has shown a stronger correlation with gold than with equities. This shift followed dramatic changes in US policy, which appeared to steer capital toward politically neutral assets: both Bitcoin and gold rose 22%. At the same time, the S&P 500 and Nasdaq-100 merely clawed back earlier losses.

This divergence continues on shorter time frames. Since May 12, major US indexes gained 3% to 4% on positive developments in US-China trade relations, but Bitcoin barely budged. Meanwhile, gold has started printing lower highs—a potential early signal of a downtrend. If gold enters a corrective phase, Bitcoin might follow suit. Seasonality may also play a role. The adage “Sell in May and go away” has some historical backing. May has typically been a green month for Bitcoin, while June and September are often the worst-performing months. Whether this rally has more room to run—or is due for a breather—may soon be put to the test.