TLDR
- Bitcoin price surged above $102,000 and tested $105,000
- US-China trade deal reduced tariffs from 145% to 30% for 90 days
- BTC is nearing all-time high of $109,350
- Continuous inflows into spot ETFs for 20 straight trading days
- Upcoming CPI data could provide a bullish catalyst
Bitcoin has been making impressive gains recently, breaking through key resistance levels and approaching its all-time high. The cryptocurrency is currently trading around $105,500, just 3.6% away from reaching a new record above $109,350.
The recent price surge began when Bitcoin formed a base at the $96,500 support zone. It then cleared several resistance levels, including $98,800 and $102,000.
Bitcoin reached a local high of $104,943 before entering a period of consolidation. The cryptocurrency is now trading above $103,500 and the 100-hour Simple Moving Average.
Technical analysis shows a bullish trend line forming with support at $103,500 on the hourly chart. If Bitcoin breaks through the $104,500 and $105,000 resistance levels, it could potentially rise to $106,200 and eventually $108,000.
The cryptocurrency market received a significant boost following a trade agreement between the United States and China. After two days of high-level negotiations in Geneva, both countries announced a temporary reduction in tariffs.
US-China Trade Deal Impact
The United States cut tariffs on Chinese goods from 145% to 30% for a 90-day period. China reciprocated by lowering tariffs on US goods from 125% to 10% over the same duration.
This surprise announcement triggered Bitcoin’s surge past $105,000. The trade deal comes after weeks of escalating tensions that had threatened to increase global inflation.
With trade tensions easing, investors are now focusing on the upcoming Consumer Price Index (CPI) data. The April CPI, due this Tuesday, is expected to show inflation easing to 2.3% year-on-year from March’s 2.4%.
Market analysts believe a continued softening of CPI could raise Federal Reserve rate cut expectations, providing another bullish catalyst for Bitcoin.
Even if the CPI comes in higher than expected, it might be dismissed as backward-looking, reflecting April’s tariffs rather than the recent de-escalation in trade tensions.
The Federal Reserve recently kept its benchmark interest rate unchanged at 4.25% to 4.5%. However, Chairman Jerome Powell offered dovish hints, stating that “the underlying inflation picture is good” and calling the inflationary impact of tariffs short-lived.
Bitcoin’s recent performance is also supported by continuous inflows into spot exchange-traded funds (ETFs). BlackRock’s spot Bitcoin ETF (IBIT) has registered net inflows for 20 straight trading days, accumulating over $5 billion in investor money.
The broader cryptocurrency market has also performed well. Ethereum (ETH) rose 39% to $2,500 last week, while other major altcoins such as XRP, Dogecoin (DOGE), Cardano (ADA), and Solana (SOL) saw gains of 9.7%, 56%, 19%, and 20%, respectively.
According to HTX Research, there are no signs of speculative frenzy yet, suggesting the rally could continue. Bitcoin options’ implied volatility remains stable in the 50%-55% range, well below the extreme levels typically seen at market peaks.
If Bitcoin fails to rise above the $104,500 resistance zone, it could face a downside correction. Immediate support is near $103,500, with major support at $102,800 and $100,500.
As long as yields do not climb back above 4.8% and ETF inflows remain steady, Bitcoin is likely to consolidate in the $105,000-$115,000 range while awaiting the next breakout trigger.
