Bitcoin Nears $110K: Could It Hit $120K Before the Month Ends?

It has set a new all-time high after climbing more than 40% in the past six weeks. This rally seems to be fueled by a mix of easing global tensions, renewed institutional interest, and a more welcoming environment for riskier investments like crypto.

So what's behind this explosive move?

A New Macro Backdrop Boosts Bitcoin

The U.S. surprised many by announcing a trade truce with China and a new limited economic deal with the U.K. These developments helped improve global market sentiment. Investors who had previously pulled back due to fears of rising tariffs are now returning, and many are parking their capital in Bitcoin and other digital assets.

Earlier in May, the U.S. and China agreed to temporarily lower tariffs on each other’s goods. The U.S. will cut tariffs on Chinese imports from 145% to 30%, and China will reduce duties on American products from 125% to 10%. This agreement, announced jointly in Geneva, includes a 90-day window for both sides to negotiate further.

At the same time, the U.S. also struck a trade deal with the U.K., called the “Economic Prosperity Deal.” The goal is to lower both tariff and non-tariff barriers, giving businesses in both countries better access to each other’s markets.

These moves have helped drive risk appetite back into the market — and Bitcoin is one of the biggest beneficiaries.

Institutions Are Buying Big

One of the main reasons Bitcoin is climbing isn’t just because of trader hype. It’s also due to solid demand from both retail and institutional investors.

In the U.S., Bitcoin ETFs have been attracting steady inflows. Leading the pack is BlackRock’s iShares Bitcoin Trust (IBIT), which has dominated net inflows since mid-April. According to Galaxy Digital analysts, this trend reflects a growing view of Bitcoin as a legitimate store of value similar to gold.

Jay Jacobs from BlackRock recently mentioned that countries are looking to reduce their dependence on the U.S. dollar, and are turning to alternatives like gold and Bitcoin.

In Asia, wealthier investors are also moving funds out of dollar-based assets and into gold, Chinese stocks, and crypto. This shift is further reinforcing the regional momentum behind Bitcoin’s rise.

Bitcoin’s Technical Picture Looks Strong

Bitcoin has been holding steady above $100,000 for almost two weeks now. Recent daily closes near $106,500 point to strong support. Historically, very few sessions have ended above this level, so staying here suggests real strength in the trend.

There’s also around $1.2 billion worth of short positions sitting between $107,000 and $108,000, according to CoinGlass. If Bitcoin keeps climbing, those short positions could get liquidated, potentially pushing the price up even faster possibly toward $115,000 or even $120,000.

Data from Farside also shows consistent net inflows into Bitcoin ETFs over the last five trading days. On May 19 alone, the net inflow reached $667 million, followed by another $329 million on May 20. These numbers suggest that investors are gearing up for a further breakout, especially with improving macro conditions and more clarity around regulations.

What Comes Next?

Some analysts are cautious about a potential pullback, especially as more traders start locking in profits. However, on-chain data shows that the market hasn’t hit overheated levels just yet. The current profit-to-loss ratio is still under the red zone.

If current trends continue, including steady ETF inflows, strong spot buying, and a calmer global economic outlook the path to $120,000 looks realistic. Especially if the Federal Reserve remains under pressure due to weak demand for long-term bonds, Bitcoin may continue to shine as a hedge and risk-on asset.

Bitcoin’s breakout appears to be built on solid ground. And if bulls stay in control, the next big milestone could come much sooner than expected.