Bitcoin Hovers Near $104K as Analysts Eye New Highs But Warn of Short-Term Volatility
Bitcoin’s bullish momentum carried into late Sunday, with the cryptocurrency trading at $104,000 after recently breaking above the $100,000 threshold for the first time in months. However, it has not surpassed the $104,000 mark and is trading at $104,561.
The world’s largest digital asset has maintained relative stability, with price fluctuations remaining moderate over the past 24 hours.
Data from The Block shows Bitcoin trading at approximately $103,926, marking a marginal 0.12% dip. Earlier in the day, it briefly touched $105,000, bringing it within striking distance of its January all-time high of $108,786— about 4.5% away.
Technical Strength, But Overbought Signals Loom
Analysts remain cautiously optimistic about Bitcoin’s trajectory.
Vincent Liu, CIO of Kronos Research, highlighted the asset’s strong technical foundation, noting that Bitcoin continues to trade above its 50- and 200-day moving averages. He pointed to growing institutional interest and a generally favorable outlook for 2025 as key drivers that could propel Bitcoin toward a new all-time high.
However, not all indicators suggest a smooth ride upward. Analysts have flagged Bitcoin’s relative strength index (RSI) as signaling “overbought” conditions. While this does not guarantee an immediate price drop, it suggests a higher likelihood of short-term consolidation or a minor correction.
“A period of cooling off or sideways movement wouldn’t be surprising,” said Rachael Lucas, Analyst at BTC Markets. “In fact, holding above the psychologically significant $100,000 mark could lay the groundwork for sustained gains in the longer term.”
Macroeconomic Factors Reignite Bitcoin’s Rally
The recent upswing in Bitcoin’s price is largely attributed to improved macroeconomic sentiment. Positive developments in U.S.-China trade negotiations have eased market tensions, lifting risk assets, including cryptocurrencies.
Over the weekend, trade talks between Washington and Beijing concluded with what Chinese officials described as an “important consensus.” Reports indicate that U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are set to announce further details on Monday regarding progress made during these discussions.
“Renewed optimism around U.S.-China relations has clearly fueled the latest leg of Bitcoin’s rally,” said Min Jung, Analyst at Presto Research. “We’re also witnessing a familiar rotation pattern, with Bitcoin dominance approaching levels not seen since before the 2021 bull market. This suggests capital could soon begin shifting into altcoins.”
External Pressures and ETF Flows Remain Key
Beyond geopolitical factors, analysts emphasize that sustained inflows into spot Bitcoin exchange-traded funds (ETFs) and continued accumulation by corporate treasuries remain critical for maintaining bullish momentum.
“While macro events, such as the upcoming U.S. Consumer Price Index (CPI) release on May 13, could introduce new volatility, investor focus should remain on risk management and diversification strategies,” Liu of Kronos advised.
With Bitcoin trading near historic highs, market watchers are bracing for potential turbulence while remaining hopeful for further gains. The interplay between macroeconomic developments, technical indicators, and institutional activity will likely dictate whether Bitcoin can break through its previous record in the coming weeks.
