Bitcoin’s climb back toward its January high of just over $109,000 has captivated markets — but behind the scenes, some familiar warning signs are reappearing.
Much has changed since the last major bull run in 2021. Bitcoin has shaken off its association with collapsed exchanges and shadowy players, evolving into a favored asset among institutions and ETF-heavy portfolios. Yet despite the structural progress, the price action in May is stirring déjà vu.
In 2021, bitcoin soared to $65,000 in April amid Coinbase’s IPO frenzy and corporate buying — only to crash soon after. A surprise second rally later that year pushed BTC to $69,000, defying bearish on-chain metrics. This time around, analysts are seeing eerie similarities.
A series of bearish divergences in bitcoin’s weekly RSI — a momentum indicator — has emerged since March 2024, while trading volumes are notably lighter than the last leg higher. Institutional flows on CME futures have cooled, and open interest is trailing the January rally, suggesting enthusiasm may be fading.
“These signals tell us the market’s energy is weakening, even if the price hasn’t flinched yet,” said one on-chain analyst.
Adding to the mix is speculation about President Trump potentially announcing a U.S. bitcoin reserve — a catalyst some fear could trigger a wave of profit-taking from seasoned traders expecting a “sell-the-news” reaction.
Unlike 2021, today’s crypto market has several new layers: leveraged corporate exposure, $6.3 billion in Bitcoin DeFi, and a frothy memecoin sector that could exacerbate any correction.
“Momentum is thinning, and with $150K or $200K price targets floating around, the risk of disappointment is high if the rally stalls,” warned another analyst.
The market may still break higher. But if history is any guide, traders may want to keep one eye on the charts — and the other on the exit.
