Bitcoin Price Breaks $112K: Short Squeeze, ETF Inflows, and Trump Pressure Ignite Rally For BTC-USD

Bitcoin (BTC-USD) Breaks $112K as Short Squeeze, Safe-Haven Demand, and ETF Inflows Collide

Record Price Fueled by $200M in Short Liquidations and Political Tailwinds

Bitcoin (BTC-USD) blasted through the $112,000 ceiling this week, marking a fresh all-time high, with price action accelerating after a $200 million short squeeze liquidated leveraged positions above $111,000. The surge represents a nearly 6% weekly gain and 50%+ climb since April 2, catalyzed by Trump’s intensified tariff agenda and mounting demand for neutral, anti-fiat hedges.

Institutional Accumulation and ETF Inflows Anchor Rally

The rally is underpinned by spot-driven demand, not just derivatives. Glassnode data confirms exchange reserves fell to 2.99M BTC on May 21, down from 3.11M in March—a decline of 120,000 BTC, reinforcing long-term conviction. BlackRock (BLK) now holds over 700,000 BTC, while MicroStrategy (MSTR) nears 600,000 BTC. The combined AUM of spot Bitcoin ETFs has surged to $150 billion, with weekly inflows averaging $700 million, even amid Fed policy ambiguity.

Trump's Tariff Rhetoric Fuels Anti-Dollar Hedging

Former President Trump’s demand for a 300 basis point rate cut, along with new 40% tariffs on imports from South Africa, Myanmar, Laos, and 25% levies on Japan, has heightened fears of inflationary backlash and USD depreciation. Bitcoin’s safe-haven narrative is strengthening: the digital asset has remained firm even as the S&P 500 corrected. Trump’s commentary has been directly tied to price spikes—Bitcoin jumped within 30 minutes of his Truth Social post, climbing from $109,343 to above $111,000.

Descending Channel Breakout Signals $146K Upside

From a technical standpoint, BTC broke above the descending channel’s upper trendline on Wednesday. Applying the measuring principle to the $37,600 channel height and breakout point at $108,800 suggests an upside target of $146,400—a further 32% upside from current levels. RSI remains below overbought, and Bollinger Bands compressed prior to breakout—historically an indicator of explosive price continuation.

Bhutan Sells into Strength as Portfolio Nears $1.3B

Notably, Bhutan’s sovereign fund (DHI) transferred 213.5 BTC (~$23.73M) to Binance amid the price surge, as confirmed by Arkham Intelligence. Despite the sale, their total holdings remained at 11.93K BTC, as new BTC was potentially mined. Bhutan’s total portfolio rose to $1.304B, up from $1.26B the week prior, driven primarily by BTC’s appreciation.

Dormant Wallets and Profit-Taking Resurface

CryptoQuant flagged renewed on-chain activity from Satoshi-era wallets, including two addresses moving 20,000 BTC (~$2.18B) after over 14 years of inactivity. While this triggered minor concerns about overhead resistance, the broader market absorbed the selling pressure with minimal disruption.

Derivatives Fuel Breakout: Taker Volume, Liquidations, and Funding Rates Spike

Binance derivatives data revealed a sharp uptick in short liquidations and Net Taker Volume topping $100M, while perpetual futures funding rate rose to +0.01%, the highest since June. These trends suggest sustained appetite for leveraged long exposure, indicating traders are betting aggressively on upside continuation.

Decoupling from Equities: BTC Outpaces Magnificent 7

Bitcoin’s 2025 YTD gain of +19% now mirrors Microsoft (MSFT) and Nvidia (NVDA), but its independence from equity sentiment is growing clearer. On days when the Nasdaq Composite or S&P 500 pull back, BTC remains buoyant. This divergence underscores rising institutional trust and the perceived resilience of the Bitcoin thesis amid political and economic instability.

Regulatory Momentum: Bitcoin Reserve Legislation and Emirates Adoption

Beyond price, structural catalysts are expanding. The first U.S. state has passed a Bitcoin reserve law, complementing the federal executive order. Meanwhile, Emirates Airlines signed a deal with Crypto.com to begin accepting crypto payments by 2026, a landmark for global adoption. These developments support Bitcoin’s position not just as an asset, but as an infrastructure.

Technical Support Zones to Monitor

Support lies near $107,000, which aligns with the 50-day MA and December highs. A failure to hold this level could test $100,000, coinciding with the lower trendline of the former descending channel and heavy trading volume zones. Institutional accumulation remains visible in this band.

Verdict: Buy

BTC remains in a clear bullish breakout. The price structure, spot accumulation, ETF inflows, geopolitical catalysts, and on-chain data all converge on one message: this rally has legs. With upside targeting $146,400 and support above six figures, Bitcoin (BTC-USD) remains a Buy on both momentum and fundamentals.

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