After seven weeks of gains, Bitcoin (BTC) is resting below its all-time-high with room to increase in the second half of the year.
Bitcoin surged from $74,500 to $112,000 over seven straight weeks of gains, starting on 9 April and peaking on 22 May.
Last week marked the first obvious pause in this rally, signaling a good moment to look deeper into what’s driving the market, from macroeconomic forces to on-chain data and what to expect ahead.
Macro drivers
One major macro driver has been the recent wave of US tariffs. On 2 April, President Trump announced his “Liberation Day” policy that included a 10% baseline tariff and a steep 125% tariff on Chinese imports. A week later, 86 countries were temporarily spared, marking the beginning of Bitcoin’s strong upward move as recessionary fears receded. In mid-May, the US and China agreed to a 90-day tariff truce, scaling back rates from 145% to 30% on Chinese goods.
Trump then attempted to talk tough to the European Union. On 23 May, the US announced new 50% tariffs on EU imports, an announcement that effectively ended the seven-week price rally. Two days later, Trump walked back the threat, restoring a 9 July deadline to allow negotiations with the EU. Despite this reversal, Bitcoin failed to reclaim its all-time high (ATH), signaling market hesitation amid ongoing macro uncertainty.
Another key factor is global money supply. Bitcoin’s price tends to follow changes in global M2 (which includes a basket of currencies indexed to the US dollar), the broad measure of how much money is in circulation, with a lag of about 10 weeks. This trend, famously identified by investor Raoul Pal, seems to be playing out again. As global M2 has started rising, Bitcoin has followed, reinforcing the idea that liquidity remains one of the strongest drivers of BTC price.
On-chain
On-chain data – data gathered directly from blockchains – also paints a constructive picture. The Short-Term Holder (STH) realized price, representing the average purchase price for the cohort of coins currently held by short-term holders, currently sits at around $97,000. This level has historically acted as a strong support in bull markets, often serving as a key dividing line between continuation and correction. A bull run is a sustained period of rising prices, typically driven by strong investor confidence and demand.
Other key metrics, such as the MVRV-Z Score, a valuation indicator that helps assess whether Bitcoin is overvalued or undervalued relative to its historical norms and RHODL Ratio, used to identify price extremes, also support a neutral to bullish outlook.
The MVRV-Z Score is currently at 2.35. Historically, readings above 7–9 have marked major cycle tops (e.g., December 2017, April 2021). Today’s level suggests Bitcoin is fairly valued, with no signs of a speculative peak.
The RHODL Ratio is at 3,844, well below historically extreme levels associated with market high points. Peaks above 25,000 have flagged overheated conditions, such as in 2017 when prices were unsustainably high. By contrast, the 2021 cycle peaked at 15,000, and November 2024 reached 13,000, indicating elevated but not extreme activity. Since the ratio uses a logarithmic scale, even small moves can signal rapid shifts in sentiment. Today’s level reflects an active but not euphoric market. A decisive move from here could serve as an early signal for Bitcoin’s next major directional trend.
Technical
From a technical standpoint, this is not the first time Bitcoin has struggled to sustain momentum after breaking an all-time high (ATH). In fact, this is the fourth instance where BTC has failed to rally immediately after setting a new ATH:
- March 2017: 30% drawdown post-ATH, followed by a full recovery and major bull run within six weeks.
- November 2021: A failed breakout that led into a two-year bear market.
- March 2024: A 33% correction that took 33 weeks to recover.
These historical cases show that pullbacks after ATHs are common and often part of broader continuation patterns, not outright reversals.
Conclusion
With Trump’s new tariffs adding macro uncertainty and Bitcoin’s post-ATH behaviour aligning with historical norms, we may see BTC trade below its high for a few more weeks. However, on-chain metrics show fair valuation, while rising M2 signals expanding money supply and increased liquidity, creating a favourable environment for price appreciation. If historical patterns hold, Bitcoin may experience further gains in the second half of the year.
