Will Bitcoin reach a new historical high in May?

In May 2025, the price of Bitcoin once again surpassed the $100,000 mark after three months, sparking heated discussions in the market about whether it can break through its historical high. As of May 9, the price of Bitcoin fluctuated around $103,000, just a step away from the historical peak of $109,000 set in January. This article will analyze Bitcoin's performance in May from multiple dimensions including technical indicators, macroeconomics, and market sentiment, providing data-driven decision-making references for investors.

Technical indicators show strong upward momentum

MVRV Z-Score and Cycle Main Chart Indicate Potential

The MVRV Z-Score (Market Value to Realized Value Ratio) shows that the current valuation level of Bitcoin is similar to that of the 2017 cycle, with still hundreds of percentage points of potential upside. Combined with the main chart of the Bitcoin cycle, its "overvaluation" upper limit has risen to $190,000, indicating that the market has not yet entered a state of overheating.

Pi Cycle Oscillator releases bullish signals

By tracking the 111-day and 350-day moving averages, the Pi Cycle Oscillator shows an expanding gap between the two averages, indicating a recovery in bullish momentum. Historical data shows that this signal is typically accompanied by several months of strong growth phases.

short-term technical patterns and support levels

Recently, Bitcoin has broken through the neckline resistance of the "inverted head and shoulders" pattern and has stabilized above the 200-day moving average (around $95,000), showing strong technical support. If it breaks through the previous high of $109,000, it may open up an upward channel towards $120,000 to $150,000.

Macroeconomic and Policy Benefits Combined

The expectation of a Federal Reserve interest rate cut is rising.

The market generally expects the Federal Reserve to continue its interest rate cut cycle in 2025, with the low interest rate environment driving funds toward high-risk assets. Historical data shows that Bitcoin has a negative correlation with the U.S. Dollar Index (DXY), and a weaker dollar will further boost the price of cryptocurrencies.

Regulatory policies shift towards friendliness

The Trump administration nominated a pro-cryptocurrency SEC chairman and plans to abolish the SAB121 law that restricts financial institutions from participating in the crypto market. The relaxation of policies may attract traditional financial institutions to accelerate their entry, bringing in hundreds of billions of dollars in incremental funding.

Geopolitics and Market Sentiment Recovery

The UK and the US have reached a tariff agreement to ease concerns over trade friction, leading to a rebound in risk asset preference. At the same time, institutional investors continue to increase their holdings, such as Strategy, the world's largest Bitcoin holding institution, which recently purchased 1,895 Bitcoins at an average price of $95,000, bringing its total holdings to over 550,000 coins, valued at more than $57 billion.

Halving Effect and Supply-Demand Relationship

The long-term impact of the fourth halving

The Bitcoin halving event in April 2024 will reduce the block reward to 3.125 BTC. The decrease in new supply combined with ETF fund inflows will create a supply-demand imbalance. Historical data shows that price peaks typically occur 12-18 months after a halving, with increases of 8300%, 288%, and 540% following the halvings in 2012, 2016, and 2020, respectively.

Institutional demand and scarcity are highlighted.

After the approval of the spot Bitcoin ETF, the institutional holding ratio continues to rise. The current circulation is only 19.7 million coins. If we calculate based on a conservative estimate of 1.5 million coins of annual net inflow, there may be a "liquidity tightening" in 2025, driving prices to accelerate upward.

Assessment of the Possibility of Breaking New Highs in May

Short-term fluctuations and key resistance levels

Despite Bitcoin breaking through $103,000 on May 8, attention should be paid to the historical resistance level of $109,000. Technical analysts indicate that if it can hold above $105,000, it may quickly rise to $120,000; if it pulls back, the $85,000 to $90,000 range will form strong support.

Market Sentiment and Black Swan Risk

The current market sentiment index (Fear & Greed Index) is in the "Greed" zone, and one should be cautious of short-term pullbacks due to profit-taking. Additionally, the uncertainty surrounding the investigation into Trump's cryptocurrency activities by the U.S. Senate and regulatory details may trigger volatility.

Institutional Predictions and Historical Patterns

Multiple institutions have raised their target prices for May:

• Cryptorphic predicts it may reach $156,000 before May 27;
• The LiteFinance technical model indicates that if it breaks through $109,000, the short-term target will be $127,000;
• Periodic patterns show that the "exponential growth phase" after the halving often begins in May to June, which aligns closely with the current time window.

Conclusion: May may become a critical turning point

Considering the comprehensive technical indicators, macroeconomic environment, and market supply and demand, the probability of Bitcoin breaking through the historical high of $109,000 in May is relatively high. If it can successfully stabilize, it may open the door to a new bull market ranging from $120,000 to $150,000. Investors need to pay attention to the Federal Reserve's policy direction, changes in institutional holdings, and regulatory developments, seizing opportunities for low-cost positioning amid short-term volatility. History may not repeat itself, but it often rhymes; May 2025 could become a critical milestone for Bitcoin in its journey towards the status of "digital gold."

Author: Icing, Gate.io researcher *This article only represents the author's views and does not constitute any trading advice. Investment carries risks, and users should make cautious decisions. *This content is original and copyright belongs to Gate.io. If reprinted, please indicate the author and source; otherwise, legal responsibility will be pursued.