Road to Recovery

Bitcoin has crossed a major psychological and technical milestone surpassing $100K on 8 May for the first time in over two months. This 31.8% monthly rally is supported by decisive inflows into Bitcoin ETFs and renewed institutional confidence. In this edition of the Crypto Market Monitor, we assess the key drivers behind this breakout and share our near-term outlook for the cryptocurrency market. 

After weeks of consolidating near the $95,000 level, Bitcoin has decisively broken through resistance zones, gaining momentum supported by sustained demand. The recent rally marks a significant shift in market tone, with Bitcoin now firmly positioned near its 2025 highs. 

This movement reflects broader confidence in the digital asset market, particularly from institutional channels. 

Bitcoin ETFs continue to be the primary vehicle for institutional exposure to the asset: 

• $142.3 million in net inflows were recorded on May 7 alone. 
• $1.8 billion in inflows have been logged in the week leading up to May 8. 
• BlackRock’s iShare Bitcoin Trust (IBIT) stands out with $2.48 billion in recent inflows, and a year-to-date total of $6.96 billion. 

Notably, IBIT has now attracted more capital year-to-date than the world’s largest gold ETF, indicating a shift in institutional allocation towards Bitcoin. 

Beyond ETFs, direct Bitcoin exposure by corporate treasuries and strategy funds have also grown: 

1. Public and private corporations have acquired approximately 190k BTC on YTD basis (Currently valued at ~$ 18 billion).
2.  MicroStrategy has been the leading contributor, having accumulated approximately 108k (Currently valued at ~$ 10 billion) 

This steady accumulation supports the thesis that Bitcoin is increasingly being viewed as a strategic asset and is not merely a speculative trade. 

Onchain data confirms growing investor confidence. According to data from Glassnode, approximately 97.5% of the current bitcoin circulating supply is in profit. This marks a significant improvement over previous months and leads to an improvement in sentiment for Bitcoin holders. 

Figure 1: BTC: Percentage Supply in Profit

Source: Glassnode 

The Short-Term Holder (STH) cost basis (which is the average entry price for recent buyers) is estimated at $93,600. With current prices well above this level, newer market participants appear to be in strong positions.

According to alternative.me, the Crypto Fear & Greed Index stood at 24 (flagging the sentiment to be that of Fear) on April 8 and by May 8, it rose to 65 (indicating market Greed). This upward shift highlights increasing optimism and risk-on sentiment, in line with ETF flows and improving technical strengths. 

Figure 2: Crypto Fear and Greed Index

Source: Alternative.me

The macro environment is turning favorable for risk assets, with financial conditions expected to loosen as US Treasury Secretary Bessent’s pushes for rate cuts to support struggling Americans and US President Trump aims to bring down 10-year bond yields. A weakening U.S. dollar (down 8.4% YTD) adds further fuel, historically acting as a tailwind for Bitcoin. Meanwhile, government sentiment towards crypto has shifted dramatically for the better. In a landmark move, New Hampshire has approved a crypto reserve law (titled H. B. 302) to invest up to 5% of state funds in precious metals and cryptocurrencies with over $500 Billion in Market Cap. 

Bitcoin’s climb back to beyond $100K is more than just a price move. It represents a structural shift in capital allocation, led by ETF inflows and broader institutional participation. Onchain metrics reinforce this trend, with profitability and sentiment both improving significantly.

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