Bitcoin holds above US$105K amid continued volatility

Bitcoin is holding firm above US$105,000 after weekend volatility and maintaining strength above the key US$100,000 psychological level. As I shared with The Block, this resilience reflects ongoing institutional demand and a strong technical structure, with BTC trading above its 50-day EMA, now acting as support around US$101,000. The recent push through resistance at US$106,406 signals continued bullish momentum, with the next major target at the all-time high of US$111,980.

Market sentiment remains optimistic but measured, with the Fear & Greed Index at 61 and 17 green days out of the last 30. Volatility is moderate, but elevated leverage in derivatives markets suggests caution is warranted, especially if macro conditions shift.

Macro and geopolitical forces driving market trends

BTC price action is being shaped by a combination of institutional flows, macro data, and geopolitical risk. Spot Bitcoin ETFs have brought in over US$5.2 billion in May, led by BlackRock, boosting liquidity and reinforcing long-term confidence.

Geopolitical instability, such as the recent Israeli strikes on Iranian nuclear sites, briefly pushed BTC down 4%, highlighting Bitcoin’s sensitivity to risk-off events. That said, it often rebounds quickly as investors turn to it as a geopolitical hedge.

On the macro front, markets are closely watching the upcoming Federal Reserve meeting. Interest rate expectations, alongside inflation data, will guide short-term momentum. Meanwhile, high leverage and elevated funding rates across futures markets suggest potential for a near-term correction. BTC dominance remains elevated, showing a market preference for Bitcoin in times of uncertainty, though any decline could signal capital rotation into altcoins.

Ethereum shows strength despite lagging behind Bitcoin

Ethereum is lagging behind Bitcoin in relative performance, with the ETH/BTC ratio consolidating between 0.022 and 0.026. However, in USD terms, ETH has broken above key support and is showing signs of strength, with upside potential toward US$4,000 if momentum holds.

Institutional interest is building, supported by BlackRock’s ETH acquisitions and speculation around ETF approvals. Longer term, Ethereum remains a leader in DeFi and real-world asset tokenisation, with the RWA market surpassing US$23 billion. While ETH has historically led altcoin rallies, Bitcoin’s dominance is currently capping that dynamic.

What could move the market next

Several catalysts are on the horizon. The upcoming US Federal Reserve meeting will be a key driver, with potential rate cuts likely to boost risk assets, including BTC. Geopolitical risks, particularly in the Middle East, remain headline-sensitive and could drive near-term volatility.

Regulatory signals from the SEC or US Treasury, particularly around ETFs or stablecoins, could influence sentiment and inflows. Traders should also watch for shifts in BTC dominance; a decline could spark renewed interest in altcoins like ETH. Finally, ongoing network upgrades on both the Bitcoin and Ethereum chains may impact prices by influencing user activity and investor confidence.

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