That bullish momentum continued last month as bitcoin reached a new all-time high, getting within touching distance of $112,000 on May 22. That was a sharp turnaround from the $75,000 it dropped to after US President Donald Trump made his first tariff announcements at the start of April.

But the cryptocurrency has since fallen back from its all-time high, and currently trading at around $105,000, all eyes are now on what happens next.

Can Bitcoin Stay Above $100,000?

According to James Butterfill, CoinShares’ head of research, the $100,000 resistance level is convincingly broken from a technical analysis standpoint.

“Bitcoin has pushed past the 200-, 50-, and 30-day moving averages and has significantly outperformed all other asset classes,” he says.

However, Adrian Fritz, head of research at 21 Shares, believes that the $100,000 level “isn’t yet fully validated as firm support”.

“While the breakout confirmed bullish momentum and market strength, it remains a battleground zone in the near term, particularly under the influence of broader macroeconomic uncertainty.”

In trading, resistance is a price level where a rising asset will face selling pressure and is sometimes described as a “ceiling”; whereas a support level is seen as “floor” where new buyers come in at to support prices. Bitcoin took a long time to break through $100,000, with $60,000 acting as a key resistance level in the asset’s volatile history.

Dovile Silenskyte, director of digital assets research at WisdomTree, thinks that $100,000 “was always more of a psychological milestone than a technical barrier, and the market has decisively moved beyond it.”

The real test was in investor behavior: would this milestone trigger widespread profit-taking? So far, the answer appears to be no.

“Rather than acting as a ceiling, $100,000 now looks increasingly like a new support level,” she says.

Is Bitcoin Still Speculative or a Strategic Asset?

Crypto bulls have long argued that bitcoin may eventually serve as a store of value and a hedge against expansionary fiscal and monetary policies. Adding weight to that argument, more institutions have been allocating a larger share of their portfolios to crypto investments. On the policy front, five US states have enacted new bitcoin laws, including Texas, which has established a long-awaited state bitcoin reserve.

“Physical ETPs continue to attract strong inflows – nearly $5 billion in April – signaling continued institutional acceptance,” says WisdomTree’s Silenskyte.

“For institutions, this is not just about price speculation—it is a calculated move to strategically position portfolios amid an environment defined by monetary erosion and fiscal overreach.”

According to Silenskyte, beyond strong institutional demand, macro tailwinds and supply side pressure were the key drivers behind bitcoin’s latest rally.

“Renewed expectations of US rate cuts, persistent inflation concerns, and rising fiscal stress have strengthened bitcoin’s appeal as a hedge against monetary instability and long-term sovereign risk,” she says.

Moreover, the most recent “bitcoin halving“, in April 2024, has ”cut new coin issuance in half, tightening supply at a time when demand is rising.”

“This imbalance is driving upward price momentum.”

Is Bitcoin a New Safe Haven?

“This latest rally was largely sparked by macro dislocation,” says 21 Shares’ Fritz.

“The US suffered a weak 20-year Treasury auction, and Moody’s downgraded the nation’s credit outlook, underscoring growing sovereign risk. At the same time, global long-end bond yields have ballooned across developed economies, reflecting inflation concerns, debt sustainability fears, and fractured fiscal outlooks.

“While some feared this environment might lead to short-term selling pressure, what actually followed was a surge in demand for hard assets. Bitcoin rallied in tandem with gold, reinforcing its emerging role as a non-sovereign store of value during times of trust erosion.”

Bitcoin Faces Regulatory Risk and Liquidity Shocks

Going forward, continued uncertainty around US politics and tariffs is likely to remain a key theme.

“The pushback from the New York courts does not mark the end of the tariff-related issues, and the full economic impact is still unclear,” says James Butterfill, head of research at CoinShares.

“This uncertainty is expected to fuel ongoing market volatility and encourage a longer-term shift toward looser monetary policy.”

Looking ahead, 21 Shares’ Fritz forecasts that we may see bitcoin’s price stabilize around the $100,000—$110,000 mark in the short term, barring new market shocks.

However, even without these, risks persist.

“The macro landscape is fragile, with tariff disputes, ballooning global debt, and rising yields posing threats,” he says.

“A sharp deterioration could unsettle most ‘risk-on’ assets. There’s also the risk of major BTC-holding firms needing to liquidate under stress.”

According to CoinShares’ Butterfill, the main short-term risk is a resurgence in inflation, which could prompt the US Federal Reserve to raise interest rates.

“Another concern is the possibility of a sharp reversal in the currently favorable political stance toward digital assets in the US.”

The most significant wild card appears to be an unexpectedly hostile policy stance.

“While the regulatory tide has been turning more constructive in key markets, the risk of abrupt, politically motivated action could create near-term volatility and erode institutional confidence,” says WisdomTree’s Silenskyte.

Another concern is that during periods of tightening liquidity and risk aversion, bitcoin trades in line with other risk assets.

“Should central banks pivot more hawkishly than expected [pause rate cuts or raise rates], especially in response to sticky inflation or financial instability, a sudden contraction in global risk appetite could trigger sharp corrections [in crypto markets],” she adds.

The author or authors do own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.