Bitcoin stalls at $110K but institutional investors continue gobbling up BTC

Key takeaways:

• Bitcoin is stuck below $110,000 due to macroeconomic uncertainty and as Nvidia earnings anticipation caps risk appetite.

• Strong spot BTC ETF inflows and Bitcoin options data are hints that US economic clarity could unlock BTC highs.

Investor sentiment improved on May 26 after US President Donald Trump postponed his retaliatory European Union 50% tariffs on imports. European stock markets responded positively to the development, but Bitcoin (BTC) was unable to hold the $110,000 level, leading traders to question whether a new all-time high remains within reach.

Even if Bitcoin revisits the $105,000 mark, rising institutional interest and robust derivatives markets indicate that bullish traders are neither overleveraged nor concerned about a potential correction.

Demand for leveraged long Bitcoin positions grew, as evidenced by the BTC futures premium increasing to 8% on May 26. Although this was a modest rise from 6.5% the previous day, the metric still sits comfortably within the neutral range of 5% to 10%. For context, in December 2024 the Bitcoin futures premium surged to 20% when BTC surpassed $100,000 for the first time.

Trump’s decision to delay the EU import duties until July 9 reduced some market uncertainty, yet the broader economic consequences of the ongoing tariff conflict have yet to show up in corporate earnings. Investor risk appetite now hinges in part on Nvidia's (NVDA)  May 28 earnings report, and anticipation for this possibly explains Bitcoin’s inability to break through its previous highs.

Bitcoin options markets are signaling an increased probability of upward movement. This suggests that whales and market makers remain confident, even with BTC trading just 2.6% below its record high of $111,957.

The negative 6% Bitcoin options delta skew indicates that put (sell) options are trading at a discount, a typical characteristic of bullish markets. Readings closer to zero reflect a more balanced demand between put and call (buy) options — a trend observed on May 25.

It’s likely that the persistent institutional demand for Bitcoin is gradually shifting the risk perception among the world’s largest investment firms. Michael Saylor’s company, Strategy, acquired $427 million worth of Bitcoin between May 19 and May 25 at an average price of $106,237. Meanwhile, spot Bitcoin exchange-traded funds (ETFs) saw another $2.75 billion in inflows during the same period.

During JPMorgan’s Annual Investor Day on May 19, CEO Jamie Dimon announced that the bank would finally allow clients to purchase spot Bitcoin ETFs. While the move does not include custody or official recommendations of cryptocurrencies, it opens the door to indirect Bitcoin exposure for the bank’s $6 trillion in customer deposits.

Related: Bitcoin’s new highs may have been driven by Japan bond market crisis

US markets are closed on May 26 in observance of the Memorial Day holiday. As a result, any optimism stemming from the delayed US–EU tariffs may be tempered by ongoing concerns surrounding US government debt and the threat of a potential economic recession. The recent 5.1% drop in MBA Mortgage Applications for the week ending May 23 prompted traders to adopt a more cautious stance.

While Bitcoin derivatives metrics remain healthy, upcoming economic data will be critical for market sentiment. Investors are closely watching the Richmond Fed manufacturing index due on May 28, followed by the PCE inflation data on May 30. These indicators will likely influence risk appetite and the chances of Bitcoin breaking above the $112,000 mark in the short term.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.