Americas Crypto Market Update: Bitcoin Reaches New Heights

By Francisco Rodrigues (All times ET unless indicated otherwise) The Bitcoin price, as indicated by the CoinDesk Bitcoin Price Index, has surpassed its previous record, achieving an all-time high of $111,875 in the early hours of Thursday. This surge occurs as traditional financial markets navigate rising bond yields and concerns about the growing U.S. debt. Over the last 24 hours, Bitcoin has seen a gain of approximately 3.8%, while the broader CoinDesk 20 index has risen by 4.74%. This trend of strength is driven by increasing institutional demand and a growing interest in cryptocurrency exposure. The current rally is set against a backdrop of higher yields on U.S. and Japanese government bonds, with the 10-year U.S. Treasury yield reaching 4.6% and the 30-year yield topping 5%. These increases are largely due to concerns over President Donald Trump's tax bill, which analysts estimate could add up to $5 trillion to the country's debt, according to Reuters. In Japan, yields on 30- and 40-year government bonds have also hit record highs, with the country's debt-to-GDP ratio standing at 234%, as reported by QCP Capital. The growing scrutiny and weak demand for long-dated JGBs have led to soaring yields. Higher yields on relatively safe investments can lower the appeal of riskier assets, including stocks and cryptocurrencies. However, despite this, BTC has not shown significant signs of decreased demand, raising questions about the sustainability of the current rally. Traders have been building large long positions in BTC options, with the most open interest concentrated at the $110,000, $120,000, and $300,000 calls for contracts expiring in late June. This indicates a continuing bullish conviction among traders. U.S.-traded spot bitcoin exchange-traded funds have seen significant demand, with total net inflows reaching $1.6 billion over the week and $4.24 billion so far in May, according to SoSoValue data. The inflows, combined with the rise in bitcoin's price, have resulted in the ETFs' total net assets hitting a record $129 billion. However, there are some signs of bearish activity. According to Wintermute OTC trader Jake O., the largest block flow this week continues to be ETH December call spreads, while overnight BTC butterfly positions suggest that some traders are positioning for consolidation around current levels. Jake O. notes that this positioning is for consolidation, not decline. Additionally, traditional participants may be too bearish, as markets are now pricing in a 6-level cut all the way down to BBB+ following the U.S. credit downgrade. Furthermore, Jake O. suggests that a recent equities market sell-off may not be a result of repositioning due to higher bond yields but rather profit-taking after nine consecutive positive sessions. It is essential to remain alert to these market movements. Key areas to watch include token events, conferences, and token talk, as well as derivatives positioning and market movements. Bitcoin statistics, technical analysis, and crypto equities are also crucial for understanding the current market landscape. Spot BTC ETFs and spot ETH ETFs, as reported by Farside Investors, provide valuable insights into the market. Overnight flows and the chart of the day offer further information on the current state of the crypto market.