Will Bitcoin Fall Back Below USD 100,000?

·

Bitcoin’s journey past the USD 100,000 milestone marked a pivotal moment for digital assets, but questions remain: Can it hold this level? Or will macroeconomic pressures push it back below the psychological threshold? While the rally signals growing confidence, volatility looms as inflation, liquidity shifts, and regulatory uncertainty continue to shape market dynamics.

Bitcoin’s Ascent to and Retreat from All-Time Highs

Bitcoin has experienced a notable resurgence since early April, defying broader financial market turbulence triggered by global tariff tensions. Despite initial dips—falling to around USD 75,000 following former U.S. President Donald Trump’s aggressive tariff proposals—the cryptocurrency rebounded strongly. By May 12, a temporary U.S.-China trade truce helped stabilize markets and sparked a surge in risk appetite, propelling bitcoin to a three-month high.

The momentum carried into late May, with bitcoin reaching nearly USD 112,000 on May 22—its highest level to date. However, it has since pulled back slightly and is currently trading around USD 108,000. This consolidation phase raises a critical question: Is USD 100,000 now a floor or just another temporary peak?

👉 Discover how market sentiment is shifting at this critical price juncture.

Core Keywords:

Is USD 100,000 a New Support Level?

From a technical standpoint, many analysts believe bitcoin has convincingly broken through the USD 100,000 resistance barrier. James Butterfill, Head of Research at CoinShares, notes that bitcoin has surpassed key moving averages—including the 30-, 50-, and 200-day—signaling strong bullish momentum. “Bitcoin has significantly outperformed other asset classes,” he observes.

However, Adrian Fritz, Head of Research at 21 Shares, cautions that while the breakout confirms strength, the level hasn’t yet been fully validated as durable support. “It remains a battleground,” Fritz says, particularly amid ongoing macroeconomic uncertainty.

In traditional trading terms:

Historically, USD 60,000 served as a major resistance point during previous cycles. The prolonged struggle to breach USD 100,000 made its eventual突破 (breakout) more symbolic than structural—yet market behavior since then suggests a shift in perception.

Dovile Silenskyte, Director of Digital Assets Research at WisdomTree, argues that USD 100,000 was always more psychological than technical. “The market has decisively moved beyond it,” she says. More importantly, there hasn’t been widespread profit-taking—a sign that investors view this level as sustainable. “Rather than acting as a ceiling, USD 100,000 now looks increasingly like a new support level.”

Institutional Adoption Strengthens Bitcoin’s Position

One of the most significant developments underpinning bitcoin’s latest rally is growing institutional participation. Physical exchange-traded products (ETPs) have attracted nearly USD 5 billion in inflows during April alone—evidence of deepening acceptance among traditional finance players.

Silenskyte emphasizes that institutions aren’t merely speculating. “This is a calculated move to strategically position portfolios amid an environment defined by monetary erosion and fiscal overreach.” Several U.S. states—including Texas—have passed legislation establishing state-level bitcoin reserves, further legitimizing its role in public finance.

The confluence of macro tailwinds and supply-side constraints has amplified demand:

“The halving tightened supply at a time when demand is rising,” Silenskyte explains. “This imbalance is driving upward price momentum.”

Could Bitcoin Become a Modern Safe Haven?

Traditionally, gold has served as a hedge during times of economic instability. But recent trends suggest bitcoin may be joining its ranks.

Fritz attributes the latest rally to “macro dislocation”: weak U.S. Treasury auctions, Moody’s downgrade of America’s credit outlook, and surging global bond yields—all pointing to deepening sovereign risk. In response, investors have turned to hard assets.

“Bitcoin rallied in tandem with gold,” Fritz notes, “reinforcing its emerging role as a non-sovereign store of value during times of trust erosion.”

This parallel performance strengthens the argument that bitcoin is evolving beyond pure speculation into a strategic hedge against monetary instability and long-term sovereign debt risks.

Risks Ahead: Regulation, Liquidity, and Market Shocks

Despite bullish indicators, significant risks remain.

Butterfill warns that inflation could reaccelerate—potentially forcing the Federal Reserve to hike rates again. “That would tighten liquidity and pressure risk assets,” including crypto.

Additionally, political shifts pose a threat. While current U.S. policy appears favorable toward digital assets, a sudden reversal could undermine investor confidence. “The risk of abrupt, politically motivated action could create near-term volatility and erode institutional trust,” Silenskyte cautions.

Another wildcard is liquidity contraction. If central banks delay rate cuts or turn hawkish due to persistent inflation, global risk appetite could shrink rapidly—dragging bitcoin down with equities and other risk-on assets.

“There’s also the risk of major BTC-holding firms needing to liquidate under stress,” Fritz adds. Such events could trigger sharp corrections even without broader systemic shocks.

👉 Explore how traders are preparing for potential market shifts ahead.

Frequently Asked Questions

Q: Has Bitcoin permanently broken above USD 100,000?
A: While technically broken to the upside, sustained support above this level depends on continued institutional demand and stable macro conditions. It's not yet guaranteed.

Q: Why did Bitcoin rise after tariff announcements?
A: Initially, tariffs caused market panic and a drop in Bitcoin’s price. But the subsequent flight to hard assets—driven by fears of inflation and fiscal instability—helped fuel its recovery and rally.

Q: How does the 2024 Bitcoin halving affect price?
A: The halving reduced new supply by 50%, creating scarcity. When combined with rising demand—especially from institutions—it exerts upward pressure on prices over time.

Q: Can Bitcoin act like gold during crises?
A: Increasingly yes. Recent co-movement with gold during periods of sovereign risk suggests Bitcoin is gaining recognition as a non-sovereign store of value.

Q: What could cause Bitcoin to fall below USD 100,000 again?
A: A resurgence in inflation, tighter monetary policy, regulatory crackdowns, or large-scale sell-offs by major holders could all trigger a pullback.

Q: Are physical Bitcoin ETPs safe for long-term investment?
A: Physical ETPs hold actual Bitcoin and offer regulated exposure without custody risks. They are considered one of the safest ways for institutions and retail investors to gain exposure.

Outlook: Stability or Volatility Ahead?

In the short term, Fritz forecasts bitcoin may stabilize between USD 100,000 and USD 110,000 barring any major shocks. However, the macro landscape remains fragile—marked by tariff disputes, ballooning global debt, and rising yields.

Butterfill believes ongoing uncertainty will fuel market volatility but may also accelerate a shift toward looser monetary policy over time—a potential long-term tailwind for bitcoin.

Ultimately, whether bitcoin can maintain its foothold above USD 100,000 hinges not just on charts or algorithms—but on trust in institutions, confidence in monetary systems, and the evolving role of digital scarcity in a world of expanding debt.

👉 Stay ahead of the next market move with real-time data and insights.