Over the past week, from May 12th to 19th, Bitcoin has had quite a ride. It surged past $106,000, falling to around $102,000 on Monday morning before climbing to $105K, leaving traders scrambling for answers. (19th May, 2025)

---

Key takeaways: 

• Bitcoin pushed past $106K midweek but lost momentum and dropped to $102K on Monday before recovering to $105,000
• In the current bull cycle, traders betting on price declines have been significantly more cautious in building short positions than in the 2021 rally, but Whales are still buying confidently. Michael Saylor’s tweet captures the mood and enduring market strength: “Never short a man who buys orange ink by the barrel.”

---

Source: CoinMarketCap

Early in the week, the Bitcoin price was clearly on an upswing. It started in the $ 103 K-$104 K ballpark and pushed past $106K by midweek, the highest in over three months. Sure, there were daily hiccups, but the overall mood was bullish. 

Trading volume backed that up. There was real momentum, not just wishful thinking. And somewhere in all that, Bitcoin’s market cap crossed $2.1 trillion, setting another record. Milestones all around, and the mood of a sustained price momentum was undoubtedly in the air.

Then came Sunday night into Monday morning, when the party abruptly ended. The price dropped hard, falling below last week’s level of $104,000 and erasing the gains that had built up.

As of this Monday morning, 19th May, Bitcoin is still sliding at around $102,000 to $105,000

So, what’s driving all this chaos? Here’s our take:

Moody’s downgrades the United States’ credit rating

The U.S. Dollar Index slipped to 100.30 (Monday morning) after Moody’s downgraded the country’s credit rating from AAA to AA1 late Friday. The downgrade wasn’t exactly out of left field. Moody’s pointed to the growing budget deficit and ballooning interest payments as key concerns.

As the dollar softened, investors did what they often do during uncertainty: they looked to gold. The metal edged up $3240, though the market response overall was subdued. Typically, a weaker dollar lifts risk assets, including Bitcoin, as some investors start eyeing alternative stores of value.

Meanwhile, yields on the 10-year Treasury bonds jumped to 4.5%, signaling a bump in the perceived risk of holding U.S. government debt. 

What does this mean for Bitcoin?

Image source: Bloomberg

On one hand, a weak dollar benefits commodities, emerging markets, and crypto. On the other hand, rising yields and renewed concerns about fiscal stability have taken the shine off stocks and corporate credit.

So, where does that leave Bitcoin? Oddly enough, in a decent spot. Despite the broader risk-off mood, Bitcoin might benefit here.

 The “digital gold” narrative is getting a boost, and a softer dollar favors it.

Bitcoin bears are treading more carefully this time around.

In the current bull cycle, traders have been noticeably more cautious in building short positions than during the 2021 rally. Analysts say the only notable long squeeze occurred around the $80K level during the correction. This shift in sentiment suggests that bears have become more risk-averse, a generally bullish signal.

Bitcoin grabbed liquidity above $104K–$106K but failed to hold.

Swissblock analysts noted that Bitcoin briefly broke above the $104,000–$106,000 resistance range. This triggered a liquidity grab, failing to sustain the breakout. 

Image credit: Swissblock technologies.

The rejection pushed the price back into a previous high-volume area, with immediate support at $101,500–$102,500 now under pressure. 

If this support fails, the next key downside target lies between $97,000 and $98,500.

Optimism around the US-China trade deal is cooling off

Hopes that the U.S. and China would strike a deal and sidestep a full-blown trade war are starting to fade as negotiations drag on.

Last week, Trump’s tariffs on Chinese goods were slashed from a sky-high 145% to just 30% as both sides hashed out an agreement in Switzerland. India saw a similar cut, landing at 27%. But despite the headline drop, the mood in the markets has shifted.

Asian stocks are pulling back as the rally fueled by US-China optimism loses steam.

The result of this?

 Investors are taking a breather, focusing on earnings and the broader economic picture. 

Over in Europe, markets are poised to open lower too, continuing a stretch of losses driven by profit-taking and a more cautious tone across the board.

Even analysts are scratching their heads over what the talks are trying to achieve. Marc Chandler, Chief Market Strategist at Bannockburn Global Forex, told Reuters: 

“Many people are confused by the real goal… this buys some more time. I sort of think the U.S. blinked. I’m not a big fan of the tariffs in the first place, but once they were in place, the U.S. seemed to back down without getting much in exchange.”

His take reflects the broader market mood: uncertainty is in the air. And that uncertainty has also spilled into crypto, where many traders are pausing and waiting for clearer signals before making their next move.

Looking ahead: What are analysts and the market saying?

All eyes are now on the $106,500 level, which has become a key resistance zone. A clear breakout could open the door to further gains, but a pullback to lower support levels wouldn’t be surprising if Bitcoin stumbles here.

The CoinMarketCap Fear & Greed Index is 71, well into “greed” territory. That kind of bullish sentiment can be a good sign of momentum, but also raises the odds of a short-term shakeout.

Plenty of analysts are leaning bullish, provided Bitcoin can crack through resistance. Trader Mags, for instance, offers two possible scenarios: the price consolidates a little and then breaks out aggressively to the upside, or the price consolidates and breaks down toward the mid-range. Both scenarios are bullish.

Digital asset analyst Crypto Patel echoed that sentiment, calling $106,500 a “crucial resistance” and setting his sights on $120,000 if the level is breached. “Depending on how Bitcoin performs here,” he says, “we could see a strong continuation or a sharp pullback.”

Others echo that cautious tone. Trader CrypNuevo, for example, isn’t sold on the breakout just yet: “It’s been a slow week, and Bitcoin still hasn’t cleared that resistance. I still think a downside scenario is on the table.”

From a technical standpoint, the charts mostly lean bullish. The 50-day and 200-day moving averages are trending higher, which is typically a strong signal. The RSI, meanwhile, has cooled off from overbought levels and now sits in more neutral territory in some timeframes, even though it still shows bullish momentum in others.

So, while there may be bumps along the way, the bigger picture favors the bulls for now.

Bitcoin performance month to date (MTD)

~+21% increase

Source: Coinmarketcap

Bitcoin has been on an impressive run from April 19 to May 19, 2025. It started in the low-to-mid $80,000s and kept climbing, brushing up against the $100K mark by the end of April. By early May, it had settled into the mid-$103Ks. All in all, that’s a gain of more than 21% in just a few weeks. 

Bitcoin performance year to date (YTD)

~+53% increase

Source: Coinmarketcap

Looking at the past year from May 19, 2024, to May 19, 2025, Bitcoin’s performance has been nothing short of impressive. It started at around $64,000 and has gradually climbed into the $100,000 territory. That’s close to a 55% gain in twelve months. 

We’ll monitor tariff activity and the market and share a fresh update on Monday, May 26, 2025.

Cryptocurrency prices are highly volatile and can change rapidly; the prices and trends reported here, including those sourced from CoinMarketCap.com and other references, may not reflect real-time values at the time of reading.

---

Important Note: Paxful does not provide investment, tax, or legal advice, and you are solely responsible for determining whether any financial transaction strategy or related transaction is appropriate for you based on your personal investment objectives, economic circumstances, and risk tolerance. Paxful may provide information that includes but is not limited to blog posts, articles, podcasts, tutorials, and videos. The information contained therein does not constitute investment advice, financial advice, trading advice, or any other sort of advice, and you should not treat any of the content as such. Paxful does not recommend that any digital asset should be bought, earned, sold, lent out, or held by you, and will not be held responsible for the decisions you make to buy, sell, trade, lend, or hold digital assets based on the information provided by us.