Key takeaways:
Bitcoin’s rally to new price highs happened as funding rates and trading sentiment remained unusually subdued.
Rising stablecoin supply and global M2 growth indicate untapped liquidity and the potential for further price increases.
Long-term holders are not aggressively selling, reflecting their expectation for continued Bitcoin price appreciation.
Bitcoin (BTC) hit a new all-time high on May 21, with prices rising to $111,860 on Binance on May 22, but the markets lack the state of frenzy associated with new highs. Economist and crypto commentator Alex Krüger noted that “this is the least euphoric new all-time highs” for Bitcoin, after highlighting subdued funding rates for Bitcoin across crypto exchanges.
Bitcoin price and aggregated funding rate. Source: Coinalyze
The chart illustrates that the current BTC funding rate is significantly below previous market highs observed during March and November 2024. The funding rate was six times higher in Q1 and three times higher in Q4 last year.
These low rates indicate minimal speculative activity in the futures market, with the rally driven by spot buyers rather than leveraged traders, reducing the risk of over-leveraged corrections.
Such a scenario also indicates that Bitcoin might not have reached a state of euphoria yet.
The availability of untapped liquidity in the crypto ecosystem underscores the potential for further growth. Stablecoin market capitalization, often a leading indicator of incoming capital, has risen to 14% in 2025. Tether’s (USDT) market cap jumped to $152 billion from $139 billion in January, while Circle’s USDC supply has increased by 35% to $58 billion.
Total stablecoin supply. Source: Token Terminal
Stablecoins often act as a bridge for new capital entering the crypto market, and their growth suggests a substantial pool of liquidity that has yet to be fully deployed into Bitcoin and other crypto assets.
Additionally, global liquidity trends provide further tailwinds. The global M2 money supply, which measures the total money in circulation across major economies, grew by 5% in Q1 2025, driven by monetary policy adjustments in the US, EU, and Japan.
Cointelegraph reported a strong correlation, exceeding 80%, between Bitcoin’s price and global liquidity, typically with a 60-day lag, pointing to further buying pressure in the coming months.
Bitcoin price and Global M2 supply. Source: X.com
Related: These 4 memecoins can outperform Bitcoin this cycle
“Muted” profit-taking reflects confidence in Bitcoin
Glassnode data adds another layer of insight into Bitcoin’s current market dynamics. Despite the new highs, profit-taking among Bitcoin holders remains restrained. The data analytics platform noted,
“When $BTC hit all-time high yesterday, total profit-taking volume was around $1.00B – less than half the amount realized when #BTC first crossed $100K last December, which hit $2.10B. Despite a higher price, profit realization was far more muted.”
This muted activity suggests that long-term holders are not rushing to cash out, which typically reflects confidence in further price appreciation.
Bitcoin spent volume by age data. Source: X.com
The lack of widespread participation indicates that Bitcoin’s rally is not a crowded trade, leaving room for new capital to enter the market. The restrained profit-taking, combined with low speculative activity in the futures market, paints a picture of a market far from overheated or “euphoria”.
Related: Bitcoin tops Amazon market cap on ‘Pizza Day’ as price sets new highs
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
