Bitcoin reached a new all-time high of $109,827 on May 21, raising questions about the sustainability of its recent rally. The $77 billion in Bitcoin futures open interest suggests that while derivatives markets have played a role, a closer examination reveals a healthier overall market. The current annualized futures premium of 7% indicates a more cautious sentiment compared to the 15% seen during the previous peak in January, where excessive leverage fueled the price surge. Balanced order books and significant spot Bitcoin ETF inflows, totaling $1.37 billion between May 15 and 20, further imply that spot buyers are driving the recent momentum. Additionally, there was only $170 million in bearish futures positions before the May 21 spike. This indicates a lack of excessive speculative trading, which supports a continued positive outlook for Bitcoin's price potential, particularly in light of favorable macroeconomic conditions. Analysts suggest that reaching $110,000 or more is feasible, especially given the weak position of the US Federal Reserve, which may drive investors toward riskier assets like Bitcoin.

Source 🔗