Last week, Bitcoin rose above the $100k psychological price point, beating April’s tariff blues. Sentiments continue to remain bullish entering the third week of May, as for the first time since the end of January, Bitcoin hit $105k earlier today.
The currency has since stabilized above $102K and continues to exhibit strong signs of further gains.
The Immediate Cause: US-China Find Common Ground
The rally was triggered amidst White House’s announcement that the United States and China have agreed to reduce their respective tariffs to 10% for an initial 90-day period beginning May 14. This marks a 24% reduction in tariffs from current levels.
“The consensus from both delegations is that neither side wants to be decoupled,” US Treasury Secretary Scott Bessent explained, acknowledging that high tariffs act as an embargo and both sides are interested in continuing to trade with each other.
The constructive tone of the tariff negotiations, and optimistic outlook in the days leading up to the announcement show promise that “sudden re-escalation” is unlikely.
How the Crypto Market Reacted:
While Bitcoin soared past $105k, Ethereum was not far behind, moving past $2600, after starting the day at $2400. XRP rose by 8.5% and CRO is stable above the $0.1 price point.
Source: CoinMarketCap
As investor confidence increased, Futures on the S&P 500 and Nasdaq rose, S&P500 and Nasdaq grew by around 3% while in Europe, the STOXX 600 increased by 0.8%.
Bullish Foundations Signal Movement Towards New ATHs:
Beyond being an immediate reaction to the “reset” in US-China relations, the bullish trends are the result of strong foundations with which the market entered May.
Despite broader turbulence, US federal interest rates have remained between 4.25% and 4.5%. Investor sentiment towards Bitcoin and other cryptocurrencies have been largely favourable since the beginning of the year due to the institutional support by the Trump administration.
Further, analysts say that historic trends are setting Bitcoin up for new ATHs, surpassing January peaks:
With geopolitical winds turning favorable and investor sentiment heating up, Bitcoin looks poised to go above and beyond in the coming weeks.
