Is $107,000 a false breakout or a new all-time high? 5 things you need to know about Bitcoin this week

1. Liquidity Game: From "False Breakout" to Dual Emotional Squeeze On May 18, 2025, Bitcoin dramatically opened a new week. After breaking through the narrow range of $103,000, the price quickly surged to $107,000, creating a new multi-month high, but then plummeted 4% within 4 hours, falling back to around $102,000. This classic "liquidity extraction" method both cleared short leveraged positions and trapped emotional long traders. CoinGlass data shows that total network liquidations reached $673 million within 24 hours, with 62% being short positions, reflecting intense market competition before breaking historical highs. 2. Historic Weekly Close: Structural Changes Behind New Highs Despite volatile movements, Bitcoin achieved its highest-ever weekly closing price at $106,500, a 2.1% increase from December 2024's previous high. This milestone reflects fundamental market structure changes: - Increased institutional dominance - Cooling derivatives market - Technical pattern validation 3. Macro Variables: Soft Dollar and Policy Negotiations Bitcoin's breakthrough is closely related to global monetary system reconstruction. The USD index has fallen 9% this year, reaching a new low since April 2022. 4. Market Divergence: Cryptocurrency and US Stock "Correlation Paradox" Current market shows complex divergence characteristics: - Short-term deviation - Long-term convergence - Ecosystem differentiation 5. Trading Volume Increment: Bull Market Continuation or Local Peak? CryptoQuant on-chain data reveals key warnings about potential local market top. 6. Institutionalization and National Strategy: Bitcoin's "Quasi-Sovereign" Reconstruction Trump administration's policy shift is reshaping Bitcoin's underlying value logic.

• National Reserve Mechanism: The United States establishes a "Strategic Bitcoin Reserve", incorporating 200,000 BTC into the foreign exchange stabilization fund, forming an asset pool parallel to gold reserves.
• US Debt Crisis Transfer: Tether and other stablecoin issuers hold $120 billion in short-term US Treasury bonds, converting the crypto market into a US debt liquidity buffer pool through a credit expansion chain of "1 USD → 1 USDT + 1 US Treasury bond".
• Geopolitical Financial Instrument: The Russian Central Bank rates Bitcoin as the "Best Asset of April 2025", with inflation-hit countries like Turkey and Nigeria accelerating USDT cross-border payments, making Bitcoin a hedge against US dollar hegemony.

This process also brings systemic risks: 41% of Tether's reserve assets are long-term locked USDT, with a serious maturity mismatch with 86% short-term US Treasury bonds, similar to the structural hidden dangers accumulated during the 2008 subprime mortgage crisis.

7. Dual Verification of Technical Aspects and On-chain Data

In-depth analysis of Bitcoin's micro-market behavior:

• UTXO Age Distribution: The proportion of Bitcoin held for over 5 years has risen to 28%, creating a historical high, indicating the "diamond hands" group is still expanding.
• Exchange Net Flow: Binance has seen a net outflow of 3.12 million BTC in the past 30 days, with institutional funds settling through over-the-counter (OTC) channels, reducing market selling pressure.
• Miner Behavior Indicators: Network hash rate breaks through 600 EH/s, but miner wallet balances drop to 1.8 million BTC, with selling pressure concentrated in the $40,000 to $60,000 cost range.

These data confirm the characteristics of a "structural bull market": decreased price volatility, but synchronized increase in holding concentration and on-chain activity, with the market transitioning from "speculation-driven" to "value storage demand-driven".

Conclusion: Survival Rules of the New Cycle

The $107,000 Bitcoin game is essentially a collision between institutionalization and traditional market rules. Despite short-term technical correction and liquidity risks, structural variables like El Salvador's national reserves and ETF institutionalized capital inflows are reshaping its "digital gold" underlying logic. For investors, maintaining rationality amid enthusiasm is crucial:

1. Position Management: Retain 50% base position, add positions in batches below $102,000, stop loss below $98,000.
2. Hedging Strategy: Long BTC/short SOL cross-variety hedging, or allocate gold to balance volatility.
3. Macro Monitoring: Keep a close eye on the June FOMC meeting and non-farm data, with the second wave of the bull market potentially launching if CPI falls below 2.5%.

History will not simply repeat itself, but the human nature of capital games remains eternal. When the last leveraged long position is liquidated, it may be the beginning of a new cycle.