Bitcoin has recently surged to around $109,700, stirring excitement in the cryptocurrency market. However, despite this rally, some professional traders are expressing reservations about the sustainability of Bitcoin's upward momentum.

Mixed Signals in the Market

While Bitcoin has shown resilience and even broken through key levels, derivatives data suggests that traders are hesitant to fully commit to a bullish outlook. On May 23, Bitcoin reached nearly $112,000, marking a 50% increase from its April 1 lows. Yet, analysts suggest that the price is now consolidating, with "signs of easing momentum". The daily Relative Strength Index (RSI) had entered the overbought zone at 79.6 but has since dropped, signaling a potential cooling of buyer enthusiasm and a possible pause or reversal in the bullish trend.

Additional data indicates that while Bitcoin futures open interest (OI) rose to all-time highs and funding rates increased, the perpetual CVD trended lower, hinting at stronger sell-side flows and a more cautious stance among traders. This decline in CVD reflects bearish sentiment and highlights dominant sell-side pressure in Bitcoin's futures market.

Factors Influencing Bitcoin's Price

Several factors are contributing to the current market dynamics. Macroeconomic trends, regulatory developments, and overall investor sentiment all play crucial roles in influencing Bitcoin's price. For instance, the recent rally coincided with monetary expansion in the eurozone and signs of weakness in the United States labor market. The eurozone's record-high broad money supply (M2) in April likely played a significant role, with data showing a 2.7% year-over-year expansion.

Geopolitical tensions and tariff concerns have also led investors to adopt a cautious stance. The potential for increased import tariffs on goods from Japan and a tougher stance from the EU Trade Commissioner during negotiations in Washington add to the uncertainty. These factors may explain the subdued demand for leveraged long positions in Bitcoin, reflecting heightened economic recession risks.

Technical Analysis and Potential Price Correction

Technical analysis reveals potential resistance around the $130,000 level, which could hinder further upward movement. The $100,000 mark is considered a psychological support level, and a decline towards this threshold might be viewed as a healthy correction. Some analysts have pointed out a bearish divergence in momentum indicators, such as the RSI and MACD, which may signal a shift in market sentiment.

One professional trader has noted a textbook Evening Star formation on the weekly chart, a classic bearish reversal signal. They also highlight bearish divergence on shorter timeframes, coupled with weakening volume on green candles and heavier volume on red candles, suggesting that smart money is distributing rather than accumulating. Based on these technicals, they are bracing for a potential 15% to 25% move if key levels fail.

Alternative Perspectives and Future Outlook

Despite the cautious sentiment among some traders, others remain optimistic about Bitcoin's future. Some analysts predict that Bitcoin could reach $150,000 or higher, provided it holds above the $106,000 level. They point to Bitcoin's historical correlation with global M2 money supply, suggesting that as global liquidity expands, Bitcoin's next target could be around $170,000.

The weakening US dollar also adds fuel to the bullish outlook, with the US Dollar Index (DXY) having fallen significantly in the first half of 2025. Moreover, the increasing institutional demand via ETFs and corporations supports the expectation of further price appreciation.

Overall, the Bitcoin market presents a complex picture with conflicting signals. While the recent rally to $109,700 has captured attention, professional traders are closely monitoring various factors, including technical indicators, macroeconomic trends, and geopolitical developments, to assess the true strength and sustainability of Bitcoin's price momentum.