Bitcoin surges 4% to $109,700 as eurozone money supply expands 2.7%

Bitcoin (BTC) surged to nearly its all-time high this Wednesday, reaching $109,700 after rebounding from the $105,200 support level. This surge coincided with signs of expansion in the eurozone’s money supply and weak labor market data from the United States.

Despite the price being just 2% below Bitcoin’s record high of $111,970, professional traders seem hesitant to declare this a sustainable breakout. The latest BTC derivatives data indicates that the strength of the rally is still uncertain.

One crucial indicator is the Bitcoin futures premium, which remained below the 5% neutral threshold on Wednesday. Although the premium increased from 4% on Monday, it is still far from the levels that typically indicate strong bullish sentiment. This cautious trend has persisted since mid-June when the indicator last approached bullish territory during Bitcoin’s earlier attempt to surpass $110,000. The lack of demand for leveraged long positions suggests that traders are still cautious about macroeconomic risks.

Some analysts attribute the recent BTC spike to the eurozone’s record-high M2 money supply, which grew 2.7% year-over-year in April. Combined with the latest ADP report showing a decrease of 33,000 in US private payrolls in June, liquidity concerns and signs of a cooling labor market are driving safe-haven interest.

Additionally, renewed tariff threats on Japanese imports by US President Donald Trump are fueling trade war fears. Trump indicated that tariffs could be raised above 30% if no agreement is reached by July 9. In response, EU Trade Commissioner Maroš Šefčovič has been tasked by eurozone ambassadors to negotiate a tougher stance with Washington, although there is still disagreement across European capitals on possible retaliation.

Examining the BTC options market provides a clearer picture. If traders were anticipating a sharp correction, the 25% delta skew would rise above 6% as demand for protective put options increased. However, the metric remains flat at 0%, the same level as two days ago, indicating that traders see balanced risk in either direction. This neutral stance suggests that while traders are not overly bearish, they are also not convinced that Bitcoin will sustain above its recent highs without a clear catalyst.

Another concern is the widening discount of China’s Tether (USDT), which has dropped to 1% below the US dollar peg—the largest drop since mid-May. This indicates that crypto investors in China are withdrawing capital from digital assets rather than investing, undermining confidence in the rally’s sustainability.

Tuesday’s net outflows of $342 million from spot Bitcoin exchange-traded funds (ETFs) further contributed to the cautious sentiment among institutional players.

With a soft futures premium, flat options sentiment, and a weak stablecoin premium in China, Bitcoin’s push towards its all-time high could face more challenges if macroeconomic uncertainties persist. Whether BTC can convincingly break and hold above the $110,000 level will likely depend on new economic data, trade war developments, and sustained institutional inflows.