Bitcoin Hits Best 2025 High Above $105K on Inflation Cooldown and Fed Optimism
Crypto Pulse
Tuesday, May 14, 2025 – 6:18 am ET
BTC +2.1% | ETH +9.1% | DOGE +11.3%
Bitcoin (BTC) has soared past the key psychological milestone of $105,000, climbing 2.1% to $105,042.8 in early Tuesday trading, according to CoinPulse market data. The flagship cryptocurrency continues its impressive recovery, driven by a favorable cocktail of macroeconomic factors, easing inflation pressures, a softening U.S. Federal Reserve stance, and an unexpected trade truce between the United States and China.
The latest move comes as Bitcoin cements its position above the long-watched $100,000 mark, signaling growing confidence among both institutional and retail investors. The broader cryptocurrency market followed suit, with altcoins, meme tokens, and DeFi assets posting even sharper gains.
Cooling U.S. Inflation Triggers Rate Cut Bets, Risk Appetite Returns
At the core of Bitcoin’s latest rally is the unexpectedly soft U.S. Consumer Price Index (CPI) reading for April 2025. The Bureau of Labor Statistics reported CPI rose by 2.3% year-over-year, coming in below economists’ median forecast of 2.4%. On a month-over-month basis, inflation increased by just 0.2%, a figure that was also lower than consensus expectations of 0.3%.
This lower-than-expected inflation print has dramatically shifted market expectations around the Federal Reserve’s next moves. Fed Funds Futures are now pricing in a 68% probability of at least one rate cut at the July 2025 Federal Open Market Committee (FOMC) meeting, up from just 45% prior to the CPI release.
Historically, periods of easing monetary policy and falling inflation have created a conducive backdrop for risk-on assets, especially cryptocurrencies like Bitcoin, which often outperform in liquidity-driven environments. Investors are betting that a softening Fed will further weaken the U.S. dollar, potentially leading to new highs in Bitcoin’s price as demand for hard, deflationary assets grows.
Geopolitical Detente: U.S.-China Trade Truce Calms Markets
In parallel with the inflation data, geopolitical developments have added fuel to Bitcoin’s ascent. On Monday, U.S. Treasury Secretary Janet Yellen and China’s Vice Premier Liu He jointly announced a 90-day trade truce, with both countries agreeing to a significant rollback of tariffs.
Under the agreement:
The U.S. will lower tariffs on Chinese goods from 145% to 30%.
China will reciprocate by reducing its retaliatory tariffs from 125% to 10%.
The truce, described as a “confidence-building window” by officials from both countries, is designed to provide breathing space for deeper trade negotiations. Markets immediately responded positively, with global equities, commodities, and cryptocurrencies rallying on the news.
The reduced tensions between the world’s two largest economies have eased concerns over a global economic slowdown, which had been weighing on investor sentiment for months. This newfound optimism has encouraged capital flows into riskier asset classes, including cryptocurrencies.
On-Chain Data: Indicators Signal Rising Optimism, Accumulation
Beyond macroeconomic catalysts, on-chain data is reinforcing Bitcoin’s bullish trajectory.
Bitcoin Bull Score Index at 82
According to Glassnode data, the Bitcoin Bull Score Index surged to 82, its highest reading of 2025. The index, which measures the balance of spot buying versus selling, indicates robust demand in spot markets, often associated with institutional accumulation.
Bitcoin Fear & Greed Index Moves to 56.7%
The Bitcoin Fear & Greed Index also ticked higher, reaching 56.7% as of Tuesday morning. While still within the neutral range, this marks the highest level since February and signals a gradual shift toward bullish sentiment among investors.
Exchange Flows Favor Accumulation
Data from CryptoQuant shows Bitcoin exchange outflows have outpaced inflows for the fifth consecutive day, signaling continued accumulation by long-term holders. Notably, Bitcoin’s realized price, a key indicator of the average price at which BTC was last moved on-chain, has risen to $98,345—suggesting the majority of investors are now in profit.
Altcoin Market Outpaces Bitcoin, Meme Coins Join the Party
While Bitcoin led the charge, altcoins and meme tokens posted even more impressive gains, highlighting the broader strength of the crypto market rally.
Ethereum (ETH) Surges 9.1% to $2,910.45
Ethereum, the second-largest cryptocurrency by market capitalization, climbed 9.1% to $2,910.45, fueled by increasing institutional interest in Ethereum Layer 2 solutions and staking yields.
XRP, Solana, Cardano Rally
Ripple’s XRP token rose 4.2% to $2.694, while Solana (SOL) jumped 8.5%, reclaiming the $170 mark amid growing NFT ecosystem activity. Cardano (ADA) advanced 5.6%, supported by a spike in DeFi Total Value Locked (TVL) on its platform.
Meme Coins Stage Strong Comeback
Meme coins once again captured the attention of retail traders. Dogecoin (DOGE) jumped 11.3%, extending its monthly gains to 28%, while $TRUMP, the Trump-themed token, soared 9.8%, reflecting a wave of speculative trading as the 2024 U.S. Presidential election cycle heats up.
Analyst Outlook: $140,000 Bitcoin in Sight?
Market analysts are now revising their Bitcoin price targets upwards, emboldened by the combination of macro, technical, and on-chain factors.
According to Chris Martin, Head of Digital Assets Research at Galaxy Markets, Bitcoin could target $140,000 within the next 90 to 120 days if the current bullish conditions persist.
“Bitcoin has not only reclaimed $100,000 but is showing strong consolidation above it. Combined with softening inflation, a more dovish Fed, and global risk appetite returning, the stars are aligning for Bitcoin’s next major leg up toward the $140,000-$150,000 range,” Martin said.
Similarly, JPMorgan’s latest crypto note highlighted that the low VIX (Volatility Index), currently at 11.4, historically correlates with strong Bitcoin performance. The bank expects Bitcoin’s realized volatility to compress further, providing a favorable environment for trend continuation.
However, analysts also caution that upcoming events, such as the release of the Fed’s May meeting minutes and the ongoing negotiations between Washington and Beijing, could inject volatility into markets.
Conclusion:
Bitcoin’s decisive move above $105,000 represents more than a technical breakout; it marks a structural shift in investor sentiment. With inflation cooling, monetary policy set to ease, and geopolitical tensions softening, Bitcoin and the broader crypto market are poised to benefit from a confluence of supportive factors.
On-chain data corroborates the bullish narrative, showing increased spot demand, growing accumulation by long-term holders, and a rising share of investors in profit. Meanwhile, the surge in altcoins and meme tokens underscores the return of risk appetite across the crypto landscape.
While risks remain—including potential geopolitical shocks, regulatory headwinds, and Fed policy surprises—the overall market tone has turned decisively optimistic. Should these conditions hold, Bitcoin’s march toward $140,000 and beyond appears increasingly likely.
Investors and traders will be closely watching the upcoming economic data releases, central bank communications, and on-chain trends for confirmation of the current bullish momentum. See
