Bitcoin reached a new all-time high of $109,827 on May 21, but there are concerns about sustaining this bullish momentum as questions arise regarding the role of derivatives markets in the rally. The current $77 billion in Bitcoin futures open interest indicates some influence from derivatives, yet the prevailing 7% annualized Bitcoin futures premium suggests a healthier market, as it falls within the neutral range of 5% to 10%. Unlike past rallies, there is no excessive leverage, reducing fears of unsustainability. Balanced order books and $1.37 billion in net inflows to spot Bitcoin ETFs indicate that the current price increases are driven by spot demand rather than derivatives. Additionally, concerns about macroeconomic factors, such as ongoing tariff wars, may limit upward momentum. However, the potential for Bitcoin to surpass $110,000 remains, supported by weakened government bonds favoring risk-on assets like Bitcoin. Overall, indicators point to a healthy outlook for Bitcoin, despite some existing limitations.

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