Bitcoin (BTC) recorded a new all-time high of $111,970 on May 22, and bulls are confident that they can secure the $110,000 level ahead of the largest monthly BTC options expiry of the year on May 30, totalling $13.8 billion, to support the upward momentum. The reason for the bullish outlook is that bears were caught off guard by the 25% price rally over the past month.
Bulls Must Secure $110K Bitcoin Level Before $13.8B BTC Futures Contracts Expire on May 30
Open Interest (OI) in Bitcoin put options (sell) totals $6.5 billion. However, 95% of these positions are set below $109,000, which means that if the price holds near current levels of between $108,500 and $109,000, then only less than $350 million worth of put options will remain relevant during their expiry.
On the other hand, the OI in Bitcoin call options (buy) of up to $109,000 amounts to $3.8 billion. This does not mean that all call option holders were betting on Bitcoin’s price to rise, as it could also indicate that some traders may have sold the options to hedge their exposure above certain thresholds.
The most commonly utilized options trading strategy over the past two weeks was the “short call”, which is often used by investors seeking a fixed-income return as long as Bitcoin’s price remains above a particular level. Conversely, a “bull call spread” strategy hedges investors against downside risk by sacrificing gains above a certain price.
The total OI in Bitcoin futures is currently $79 billion, indicating strong demand for short (sell) positions. If BTC can maintain the $109,000 mark, then most bullish strategies should deliver positive results once the monthly options expire. However, bears may attempt to influence the Bitcoin futures market to limit their losses before the expiry on May 30, especially if the price rises above $110,000, as they may be forced to close their positions.
Bitcoin Dipped Below $109,000 after President Trump announced a 50% Tariff on EU Imports
Bitcoin experienced a sharp decline on May 23, dropping from $111,300 to $108,000, after US President Donald Trump announced a 50% tariff on all European imports, effective June 1. This sparked a global market uncertainty, which also affected the flagship crypto.
The price decline resulted in a $1.2 billion reduction in open interest in Bitcoin positions, signaling a wave of deleveraging as traders rushed to reduce futures exposure. Despite the initial panic-led sell-off, BTC rebounded to $109,000 as speculators dismissed the selling period.
Bitcoin’s price dipped to a yearly low of $74,500 on April 7, but since then, it has experienced a 48% surge. Much of those gains can be attributed to Trump scaling back proposed tariffs on America’s trading partners and inflation numbers falling below expectations – a positive sign for the US economy. Another key reason was that investors looked at BTC as a safe-haven asset amid volatile macroeconomic conditions.
Bitcoin ETFs on the Verge of Recording Biggest Monthly Inflow in Their History
Meanwhile, the spot Bitcoin exchange-traded funds (ETFs) in the US recorded more than $1.5 billion in combined inflows between May 21 ($608 million) and May 22 ($934 million). This record-breaking monthly run was significant in pushing BTC to a new all-time high. If the two-day performance is repeated in the coming days, then it would result in the net inflow for May hitting $6.68 billion, surpassing the record of $6.49 billion from November 2024.
According to TradingView data, ETF inflows helped Bitcoin register a new ATH of nearly $112,000 on May 22 before retracing to above $110,700 the following day. This meant that the price surged by 20% over the past week.
Speaking to crypto media outlet Cointelegraph, Stella Zlatareva, an editor at Nexo Dispatch, noted that the robust ETF inflows combined with Bitcoin’s run to record highs were the result of growing institutional demand and rising realized profits without any increased sell pressure.
She also mentioned that increased institutional inflows, corporate moves to add BTC to their balance sheets, and “macro dislocation” send a clear message that “Bitcoin is no longer the alternative but the benchmark.”
The surge in ETF demand coincided with reports that $1 billion worth of Bitcoins were withdrawn from the Coinbase exchange on May 9, signalling increased institutional appetite for the leading crypto asset.
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Bitcoin Could Hit $500,000 by the end of 2025 if the US announces “Budget-Neutral” Strategies to acquire the Asset
The base case for Bitcoin’s price is to surpass $200,000 by the end of the year, if the structural ETF inflows from institutions continue their momentum. However, if the US government decides to step in with Trump’s “budget-neutral” strategies to acquire Bitcoin for its strategic reserve, then the price is expected to move closer toward $500,000.
Bitcoin bulls are aiming to maintain a stronghold on the price at $110,000 before the options expiry on May 30, maximizing their gains and setting the path for an all-new peak. However, Trump’s trade war with Europe will determine whether the bullish momentum sustains or if the bears finally get their way.
At the time of writing, Bitcoin (BTC) is trading at $108,274, down 2% over the past 24 hours.