Bitcoin (BTC) remains firmly above the $100,000 mark, buoyed by favorable macroeconomic conditions. A mix of easing market volatility, lower inflation, and a new US-China trade agreement is encouraging investors to take on more risk.
Bitcoin Supported by Positive Macro Trends: $135,000 Within Reach
Low Market Volatility Fuels Crypto Optimism
The VIX index, a key measure of market volatility, has dropped to 20—the lowest level in years. This decline followed the May 12 trade deal between the US and China, which included a temporary suspension of import tariffs. Historically, a low VIX signals a "risk-on" environment, pushing investors toward riskier assets like stocks and cryptocurrencies.
Bitcoin is clearly benefiting. Network analyst Timothy Peterson forecasts that BTC could reach $135,000 within 100 days. His model, which shows a strong correlation between VIX movements and Bitcoin’s price, claims a 95% accuracy rate.
Falling Inflation and Rate Cut Expectations Boost Demand
US inflation continues to decline, with the Consumer Price Index (CPI) coming in at 2.3% year-over-year in April—its lowest level since early 2021. This strengthens market expectations that the Federal Reserve may cut interest rates later this year. Lower interest rates reduce the appeal of traditional savings, increasing demand for alternative investments like Bitcoin.
Investor Sentiment Strengthens
Investor confidence in Bitcoin is on the rise. The Bitcoin Bull Score Index recently surged from 20 to 80—a jump that has historically preceded strong upward price moves. According to CryptoQuant analysts, current demand for Bitcoin is outpacing available supply.
The Fear & Greed Index, which gauges overall market sentiment, has also climbed to 53.3%. While this doesn’t yet indicate extreme bullishness (which starts at 80), it reflects growing optimism in the crypto market.
Market analysts believe Bitcoin is gearing up to retest its all-time high around $110,000. A breakout above that level could remove a key psychological barrier and open the door for a rally toward $135,000.
