Bitcoin Breaks Past $100,000—Will FOMO Propel It to $120,000?

Bitcoin’s price rocketed past $100,000 on May 9, 2025, sending a ripple of excitement through the crypto world.

Traders watched the tape as BTC climbed from $97,200 in early Asian hours to a peak of $99,050 before settling around $103,900.

The move came amid a flurry of macro developments. Data point to a market caught between fresh liquidity, steady U.S. rates, and record bearish bets.

Bitcoin Liquidity Boost Out of Beijing

China’s central bank trimmed its one-year lending rate by 15 basis points. It also cut the reserve requirement ratio by half a percentage point. Together, these moves freed an estimated $100 billion of liquidity into the market.

The rate cut marked the first easing since December 2024. It came as Beijing seeks to shore up growth and support its equity and property markets. Traders noted the timing: China announced the measures just hours before Bitcoin broke $99,000.

Across the Pacific, the U.S. Federal Reserve paused its tightening cycle. In its May 1 statement, the Fed kept the federal funds target at 5.25 percent. Officials cited mixed growth signals and cooling inflation.

The pause contrasted with Beijing’s easing. It underscored divergent policy paths. Behind the scenes, U.S.–China relations also warmed. Diplomats held discreet talks on May 2.

They agreed to start formal trade negotiations on Friday, May 16 (U.S. Trade Representative’s Office, May 2, 2025). Traders interpreted the move as a sign of reduced friction in goods and capital flows.

Market Internals Signal Divergence

Not every indicator cheered the rally. On Coinbase Pro, Bitcoin’s price premium versus global benchmarks slipped into negative territory on May 9. U.S. traders paid a slight discount, marking the first negative premium in six weeks.

Meanwhile, CryptoQuant reported record-high short interest among institutional funds on that same day. Funds increased bearish positions as prices climbed. The setup resembles prior short squeezes, where forced buy-ins accelerate rallies.

Bulls point to China’s liquidity surge and the Fed’s hold. They see the thaw in U.S.–China ties as a further catalyst. They argue that cross-border flows may increase with formal trade talks slated for May 16.

They add that record shorts on major funds set the stage for a short squeeze. If those bets unwind quickly, Bitcoin could vault past $100,000.

Bears, however, urge caution. They note the negative Coinbase Pro premium as a warning sign. They argue that U.S. demand may lag overseas buying. They worry that heavy short positions reflect more profound skepticism.

Those shorts could reinforce selling if policy easing disappoints or trade talks stall. They also flag lower Asian volume during Golden Week from May 10 to May 16. Thin liquidity could exaggerate price swings in either direction.

Bitcoin’s climb to just over $104,000 captured a moment of policy tug-of-war. Beijing’s easing and Washington’s steady rates offered mixed signals. Improving U.S.–China ties hinted at smoother trade. Yet market internals from negative U.S. premiums to peak shorts paint a complex picture.

BTC/USDT Chart| Source: TradingView

Whether FOMO will push Bitcoin towards a new all-time high (ATH) remains open. Traders will watch for forced short-covering and volume shifts as Asia reopens after Golden Week. They will track updates from Beijing, the Fed, and USTR announcements.

At the time of writing, Bitcoin’s price is $103,782, having dropped 0.65% over the last 24 hours. The next moves may hinge as much on policy headlines as on trader psychology.