Nazia Saeed
Bitcoin (BTC) is approaching all-time highs above $109,000 as a major U.S.-China trade breakthrough fuels optimism across markets, with a pivotal inflation reading due Tuesday potentially serving as the next catalyst.
The cryptocurrency surged to $104,000 early Monday, trimming the gap to its record high of $109,350 to just 5.1%, according to CoinDesk data. The rally comes amid renewed optimism following a landmark trade agreement between the U.S. and China, and increasing speculation that April’s inflation data could revive expectations of Federal Reserve rate cuts.
Trade breakthrough revives risk appetite
After two days of intense negotiations in Geneva, U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer confirmed Sunday that Washington and Beijing have struck a new trade agreement. A joint statement outlining the deal’s details is expected later Monday, according to Chinese officials.
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This breakthrough ends weeks of escalating tariff tensions, during which both nations imposed import taxes exceeding 100%, stoking fears of global inflation and economic disruption. The timing of the agreement—just ahead of the April Consumer Price Index (CPI) release—adds fuel to an already bullish fire for risk assets, including cryptocurrencies.
Inflation in focus: A bullish setup for Bitcoin
Markets are betting that the de-escalation in trade tensions could translate into subdued inflation numbers for April, reinforcing expectations of monetary easing. RBC forecasts headline CPI to have cooled to 2.3% year-over-year in April, down from 2.4% in March. Core CPI, which excludes food and energy, is expected to remain at 2.8%, supported by easing rent pressures.
10x Research founder Markus Thielen emphasized the market’s optimistic outlook:
If CPI prints as expected, the market may interpret it as supportive. CPI could be bullish and may bring new all-time highs.
While a hotter-than-expected CPI might typically pressure risk assets, analysts say such a scenario may be downplayed as a lagging indicator—capturing the effects of now-resolved tariff actions rather than current market dynamics.
ETF inflows and fed commentary add momentum
Bitcoin’s ongoing rally has been underpinned by consistent demand for spot ETFs. BlackRock’s IBIT fund has now recorded 20 consecutive sessions of net inflows, attracting over $5 billion, according to SoSoValue.
Additionally, the Federal Reserve held interest rates steady last week at 4.25%–4.5%, with Chair Jerome Powell striking a dovish tone. The underlying inflation picture is good, Powell said, noting the tariff-related inflation surge is likely temporary.
Altcoins soar in tandem
Ether (ETH) led altcoins higher, surging 39% to $2,500 in its best weekly performance since December 2020. Other major tokens also posted strong gains: XRP (+9.7%), DOGE (+56%), ADA (+19%), and SOL (+20%), per TradingView.
HTX Research noted that despite the rally, the market remains measured, Implied volatility (IV) in bitcoin options is stable at 50%–55%, far below the 80%+ extremes seen during past bull runs. Futures leverage remains moderate, with CME Bitcoin open interest at $14.8 billion versus the $20 billion peak in 2020.
As long as bond yields stay below 4.8% and ETF inflows remain steady, HTX expects BTC to consolidate between $105,000 and $115,000, awaiting a potential breakout.
