Nazia Saeed
Bitcoin surged past $105,700 on May 12 for the first time in four months, as a landmark trade truce between the U.S. and China reignites risk appetite and sets the stage for a potential rally toward $150,000.
The rally followed the announcement of a landmark agreement between U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, who met over the weekend in Geneva. As part of the deal, the United States will slash tariffs on Chinese imports from 145% to 30%, while China will cut duties on American goods from 125% to 10%. The reduction in trade barriers marks the most substantial de-escalation in economic tensions between the two superpowers in months and signals a broader return to pro-growth, risk-on sentiment across global markets.
Financial markets reacted swiftly. U.S. equity futures rose sharply, with the S&P 500 up 2.8%, while the U.S. dollar also strengthened. In contrast, gold fell 2.3%, reflecting a rotation out of traditional safe-haven assets and into higher-risk plays—benefitting Bitcoin, which has historically thrived in such environments.
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Bitcoin, often regarded as a high-beta asset tied to global liquidity cycles, had been weighed down during the peak of the trade standoff. The tariff rollback now improves liquidity conditions and investor appetite, enabling the cryptocurrency to resume its upward trajectory. Analysts point to a textbook bull flag breakout on the weekly chart—an established continuation pattern where a period of price consolidation follows a sharp upward move.
In Bitcoin’s case, the consolidation began after prices hit nearly $110,000 in January and continued until early May, when BTC broke out of its downward-sloping flag formation.
The bullish breakout projects a price target of approximately $150,000, based on technical analysis that adds the height of the initial flagpole to the breakout level. Additional confirmation comes from Bitcoin’s weekly relative strength index, which has rebounded above 65—indicating robust momentum without yet entering overbought territory.
Still, some analysts are advising caution. According to André Dragosch, European Head of Research at Bitwise, sentiment levels have reached their highest point since November 2024. This mirrors previous periods such as April 2022 and October 2023, where peaks in sentiment were followed by local market tops and short-term corrections. Dragosch noted that the firm’s Cryptoasset Sentiment Index is flashing similar warnings, suggesting that while the long-term trend remains positive, the short-term outlook could be vulnerable to pullbacks.
Bitcoin was retracing slightly as of May 12 after reaching a local high of $107,000. Daily momentum indicators also point to potential overbought conditions. Should a correction unfold, $100,000 could serve as the next support level, with additional downside potential toward the 20-day exponential moving average near $97,385.
Despite these short-term risks, the broader outlook for Bitcoin remains bullish as macroeconomic conditions turn increasingly favorable. With trade tensions easing and central banks signaling potential rate cuts, the environment appears primed for continued upside in digital assets. The breakout toward $150,000 may just be getting started.
