Bitcoin (BTC) Hits New All-Time Highs as Funding Rates and Trading Sentiment Remain Unusually Subdued

Bitcoin's rally to new price highs happened as funding rates and trading sentiment remained unusually subdued.

Bitcoin (BTC) hit a new all-time high on May 21, with prices reaching $111,860 on Binance on May 22, but the market lacked the frenzy typically associated with such milestones.

Economist and crypto commentator Alex Krüger observed that “this is the least euphoric new all-time highs” for Bitcoin, highlighting the unusually low funding rates for Bitcoin across crypto exchanges.

As seen in the chart above, the current BTC funding rate is significantly lower than the peaks observed during the March and November 2024 market highs. The funding rate was six times higher in Q1 and three times higher in Q4 last year.

Lower funding rates indicate minimal speculative activity in the futures market. The rally is being driven mainly by spot buyers rather than leveraged traders, reducing the risk of over-leveraged corrections, a scenario that often leads to sharp price declines.

Such a scenario also suggests that Bitcoin might not have reached a state of euphoria yet. Typically, when an asset class hits new highs amid high levels of trading activity, and funding rates and derivatives markets show extreme levels of over-leverage and speculation, it indicates euphoria and a potential market peak.

However, 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 by 14% in 2025. Tether’s (USDT) market cap has climbed to $152 billion from $139 billion in January, while Circle’s USDC supply has increased by 35% to $58 billion.

Stablecoins 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 U.S., EU, and Japan.

Cointelegraph has previously reported a strong correlation, exceeding 80%, between Bitcoin’s price and global liquidity, typically with a 60-day lag, hinting at sustained buying pressure in the coming months.

'Muted' profit-taking suggests confidence in Bitcoin

Glassnode data provides another layer of insight into Bitcoin’s current market dynamics. Despite the new highs, profit-taking among Bitcoin holders remains restrained. As highlighted by the crypto analytics platform:

This muted activity suggests that long-term holders are not rushing to cash out, which typically reflects confidence in further price appreciation.

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.”