Why Bitcoin Price Could Break $110,000 in May

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Bitcoin is showing strong signals that it could surpass the $110,000 mark in May 2025, driven by its resilience across market cycles, robust risk-adjusted returns, and growing institutional demand. As BTC recently reclaimed the $100,000 level for the first time since January, market analysts are increasingly confident that a new all-time high is within reach.

This momentum isn’t just speculative—it’s backed by measurable financial metrics and shifting investor behavior. From its performance in both bullish and risk-off environments to surging spot market activity, Bitcoin is increasingly being treated like a mature, strategic asset class.

👉 Discover how market dynamics are aligning for a potential Bitcoin breakout

Bitcoin’s Dual-Environment Strength

One of the most compelling arguments for Bitcoin’s sustained growth comes from its ability to perform well in both risk-on and risk-off market conditions—a rare trait among asset classes.

According to analysis by Bitcoin Suisse, BTC has demonstrated exceptional adaptability. During periods of macroeconomic uncertainty—such as geopolitical tensions or concerns about de-dollarization—Bitcoin acts as a hedge, much like gold. At the same time, in bullish equity markets, it behaves like a high-conviction growth asset, attracting capital from investors seeking outsized returns.

This dual functionality makes Bitcoin uniquely positioned in modern portfolios. Unlike traditional assets that often move in tandem with broader market sentiment, Bitcoin operates on its own supply-driven fundamentals and decentralized value proposition.

Strong Risk-Adjusted Returns: The Sharpe Ratio Edge

A key indicator of Bitcoin’s maturation is its Sharpe ratio—a measure of risk-adjusted return. Bitcoin Suisse reports that BTC currently holds a Sharpe ratio of 1.72, second only to gold among major assets in 2025.

The Sharpe ratio calculates excess return per unit of volatility. A higher value indicates better returns relative to the risk taken. Historically, assets with ratios above 1.0 are considered strong performers; Bitcoin’s 1.72 places it firmly in elite territory.

This isn’t just a short-term anomaly. Over the past two quarters, Bitcoin has maintained positive returns across multiple market phases, including equity corrections and bond yield spikes. As Dominic Weibei, Head of Research at Bitcoin Suisse, notes:

“In today’s environment, Bitcoin has become a Swiss Army knife asset. Whether equities rally or bonds collapse, Bitcoin moves based on its own supply-demand dynamics—offering a win-win scenario traditional assets can’t match.”

Spot Market Shift: Buyers Now in Control

One of the most telling signs of a looming price surge is the recent shift in spot market dynamics.

On May 7, the 90-day spot taker buy-sell volume imbalance (CVD) turned positive for the first time since March 2024. This metric tracks the net difference between buy and sell orders executed on exchanges, reflecting sustained buying pressure over time.

A positive CVD indicates that buyers are absorbing supply more aggressively than sellers are offloading—often a precursor to upward price movement.

What’s Driving the Demand?

The surge in spot buying is largely attributed to two factors:

This shift from speculative futures trading to fundamental spot demand suggests that the current rally is being fueled by real capital deployment—not just leverage or short-term bets.

👉 See how institutional inflows are reshaping Bitcoin’s market structure

Supply Scarcity Meets Rising Demand

Bitcoin’s fixed supply cap of 21 million coins creates inherent scarcity. But beyond the protocol-level limit, on-chain data reveals even tighter constraints in available supply.

Over 86% of all Bitcoin is currently in profit, meaning most holders have little incentive to sell at current prices. Combined with steady ETF accumulation and reduced exchange liquidity, this creates a perfect storm for supply compression.

When demand rises but available supply shrinks, prices tend to respond sharply—especially during periods of heightened sentiment.

Historically, similar conditions preceded major rallies:

Today’s environment mirrors those inflection points—but with far greater institutional participation and global awareness.

Preparing for Parabolic Momentum?

Fidelity Digital Assets’ Q2 2025 Signal Report suggests that Bitcoin may be entering what they call an “acceleration phase.” Analyst Zack Wainwright identifies this stage by two key characteristics:

These conditions often precede parabolic price movements—rapid, exponential increases typically seen in late-stage bull markets.

While timing such moves is inherently uncertain, the confluence of technical indicators, macro trends (including global liquidity expansion), and structural demand supports the case for a breakout above $110,000 in May.

Core Keywords Driving This Outlook

These terms reflect both investor search intent and the underlying forces shaping Bitcoin’s trajectory.

Frequently Asked Questions (FAQ)

Q: What is the significance of Bitcoin’s Sharpe ratio being 1.72?
A: A Sharpe ratio of 1.72 means Bitcoin delivers strong returns relative to its volatility. It indicates that investors are being well-compensated for the risk they take—making BTC competitive with traditional safe-haven assets like gold.

Q: How do spot ETF inflows affect Bitcoin’s price?
A: Spot ETFs purchase actual Bitcoin to back their shares, creating direct demand. Unlike futures-based products, this results in permanent capital inflow and long-term holding behavior, reducing circulating supply and supporting price appreciation.

Q: Why does the CVD turning positive matter?
A: The taker buy-sell volume imbalance (CVD) reflects sustained buyer dominance. When this metric turns positive after an extended period, it often signals a structural shift from selling pressure to accumulation—historically preceding major rallies.

Q: Is $110,000 a realistic target for May 2025?
A: While no price target is guaranteed, multiple factors—including ETF demand, low sell-pressure zones, and macro tailwinds—make this level increasingly plausible. Technical momentum also supports a near-term breakout if current trends hold.

Q: Could external factors delay the rally?
A: Yes. Unexpected macroeconomic shocks (e.g., aggressive rate hikes), regulatory setbacks, or large-scale sell-offs from whale wallets could temporarily disrupt momentum. However, long-term fundamentals remain intact.

Q: Does on-chain data support the bullish case?
A: Absolutely. Metrics like rising active addresses, declining exchange reserves, and increasing wallet balances among long-term holders all confirm growing confidence and reduced liquid supply.

👉 Explore real-time data that could signal the next Bitcoin surge

Final Thoughts

The path toward $110,000 for Bitcoin in May 2025 is supported by more than hype—it’s grounded in measurable shifts in investor behavior, institutional adoption, and market structure. With strong risk-adjusted returns, growing spot demand, and dwindling available supply, BTC appears poised for another milestone.

While markets are never without risk, the current alignment of technical, fundamental, and macro factors paints an optimistic picture. Whether you're a long-term holder or evaluating strategic entry points, understanding these dynamics is key to navigating what could be one of Bitcoin’s most significant price movements yet.

This article does not constitute financial advice. All investments carry risk. Please conduct your own research before making any decisions.