Bitcoin’s recent 11% price surge to around $94,000 has sparked speculation about possible new highs in May. Institutional buying contrasts with caution among retail traders. A shift in Bitcoin’s correlation with equities and encouraging market indicators suggest a possible rally, although bearish signals in derivatives create doubts about sustainability.
As Bitcoin approaches potential new heights, recent moves in the market have prompted experts to speculate about the cryptocurrency’s future. The asset jumped 11% between April 20 and April 26, briefly hitting around $94,000. This surge was linked in part to encouraging economic signals from the US and strong corporate earnings. Even with some wavering, these developments paint a picture of a strong Bitcoin for now.
An influx of cash also boosted investor optimism. Spot Bitcoin ETFs saw a record $3.1 billion in new net inflows just over five days. However, not all indicators are pointing up. Some derivatives metrics have shown bearish tendencies recently, sparking concerns about whether a move past the $100,000 mark is still on the horizon.
Retail traders favour perpetual Bitcoin futures since they tightly track the current market prices. A high funding rate generally indicates that buyers are willing to pay to maintain their positions, but a decline in this rate often indicates a shift toward bearish sentiments. The negative funding rates observed on April 26 were notable, as they’re typically rare in a bull market, hinting at stronger selling pressures at that time.
It’s worth noting that investor confidence has been shaken a bit by comments from President Trump, who hinted that negotiations with China will take a turn depending on concessions from them. This uncertainty could affect Bitcoin’s prices even as stocks, including the S&P 500, show promising gains.
Moreover, Bitcoin’s ongoing separation from stock market trends is evident. The 30-day correlation between Bitcoin and the S&P 500 has dropped significantly, now only around 29%. Investors seem to be treating Bitcoin less like a tech stock and more as an independent asset class, which many see as a positive development.
This growing independence may have been underlined by the recent performance of gold, which failed to keep its bullish trend after hitting $3,500. The ongoing strength of Bitcoin above $90,000 could bolster credence in its viability as digital gold and thus lay the groundwork for further price hikes.
Interestingly, while retail traders have adopted a cautious stance, there is still a robust accumulation of Bitcoin by institutional investors. On April 26, the monthly Bitcoin futures premium increased, reflecting growing interest in bullish positions. The current figure of 6.5% is still within a neutral range but could signal a shift in momentum as investors prepare for a potential surge past the $100,000 mark.
