Why Is This Bull Run Different? Six Charts Exploring Bitcoin's Price Surge

Ismay

2025-05-22 11:05

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Original Article Title: These Six Charts Explain Why Bitcoin's Recent Move to Over $100K May Be More Durable Than January's Run

Original Article Author: OMKAR GODBOLE

Original Article Translation: Ismay, BlockBeats

Editor's Note: Bitcoin broke to a new all-time high on Pizza Day, seemingly a celebratory gift from fate to the crypto market. However, unlike previous bull markets, this Bitcoin ATH seems to belong solely to BTC, with little movement in the altcoin market. This article uses six charts to explain why Bitcoin's recent breakthrough above $100,000 may be more sustainable than January's surge. Key indicators such as the financial environment and stablecoin inflows indicate that the foundation of this rally is more solid compared to the "double top" rally from December to January last year.

Key takeaways include:

Bitcoin is currently trading above $100,000, and the market environment suggests that the foundation of this rally is more stable than the "double top" rally from December to January last year;

The current financial environment, stablecoin inflows, and the performance of spot ETFs are all more favorable for Bitcoin's trend than before;

Other key indicators do not show signs of the overheating and speculative sentiment seen at the end of last year and the beginning of this year.

Bitcoin is currently priced at $106,546.31, reclaiming the six-digit milestone. Due to the "recency bias" that often affects investors, many may think that this trend will mirror the situation from December to January last year—when the upward momentum quickly waned, the price rapidly fell back to the five-digit range, eventually dropping to $75,000.

However, looking at the following six charts, the current Bitcoin market appears more robust than during the period from December to January, indicating a higher likelihood of further upward movement.

"Financial Conditions" refer to a series of economic variables, including interest rates, inflation, credit availability, and market liquidity, which are often influenced by macro indicators such as benchmark bond yields (e.g., the US 10-year Treasury yield) and the US dollar exchange rate.

A tight financial environment suppresses risk appetite in financial markets and the real economy, while a loose environment encourages more risk-taking behavior. As of now, looking at the 10-year US bond yield and the US dollar index, the current financial environment is significantly looser than it was in January, favoring Bitcoin's continued rise.

At the time of reporting, the U.S. Dollar Index, which measures the dollar against a basket of major currencies, stood at 99.60, representing a 9% decline from the January peak of 109.00. The U.S. 10-year Treasury bond yield was at 4.52%, down 30 basis points from the January high of 4.80%.

Although the 30-year U.S. bond yield has risen to above 5%, returning to January levels, the market generally views this as a positive factor for Bitcoin and gold.

There is Still "Dry Powder" in the Market

The total market capitalization of the two major USD-pegged stablecoins — USDT and USDC — has reached a record-breaking $151 billion. According to TradingView data, this figure is nearly 9% higher than the average market capitalization from December last year to January this year ($139 billion).

In other words, there is now more "dry powder" in the market — potential funds that can be used to invest in Bitcoin and other crypto assets.

Strong Directional Bets

Since Bitcoin's rebound from a low point near $75,000 in early April, this round of gains has been mainly driven by institutions, with a focus on long positions rather than arbitrage strategies.

This can be seen from two perspectives: first, U.S.-listed spot Bitcoin ETFs continue to attract significant inflows of funds, and second, the open interest of Bitcoin futures on the Chicago Mercantile Exchange (CME) remains relatively moderate.

According to data from Velo, the nominal open interest of CME Bitcoin futures has climbed to $17 billion, reaching a new high since February 20. However, this figure is still significantly lower than the peak in December last year — $22.79 billion.

In contrast, based on data from Farside Investors, the cumulative inflow of funds into the current 11 spot Bitcoin ETFs has hit a record $42.7 billion, far exceeding the $39.8 billion in January this year.

Lack of Speculative Frenzy Signs

Historically, Bitcoin's phase or cyclical tops (including last December to this January) have typically been accompanied by high levels of market speculation, which often drive up the market capitalization of "non-serious" tokens like DOGE and SHIB.

However, there is currently no sign of a similar trend, and the total market value of DOGE and SHIB is still far below the January peak.

No Overheating Signs

Although Bitcoin is currently approaching its all-time high, there has indeed been some long leverage demand in the perpetual contract market, which is to be expected. However, overall positions are still relatively light, showing no signs of excessive leverage accumulation or overheating in long positions, and the funding rate is much lower than the peak in December last year.

The chart shows the funding rate, which is the cost of holding a perpetual contract. A positive value indicates that longs are willing to pay a premium to hold their positions, meaning longs are paying shorts to continue holding their positions. This is usually seen as a market sentiment indicator of bullishness.

Implied Volatility Indicates Market Stability

Looking at implied volatility, the current Bitcoin market appears to be more stable. Deribit's DVOL index (reflecting the expected volatility for the next 30 days) is significantly lower than the levels seen from December last year to January this year, as well as when the price peaked in March 2024.

A lower implied volatility suggests that traders are not expecting significant volatility or major uncertainty, which is usually a sign of an overheated market. Therefore, it also indicates that the current upward trend is more rational and may be more sustainable.