U.S.-China Trade Agreement Sparks Bitcoin Surge, Paving the Way for Record Highs and Altcoin Gains
Bitcoin (BTC) could be poised for record-breaking highs as recent developments in U.S.-China trade relations ease market tensions and set the stage for further bullish momentum in the crypto market. The latest trade agreement, combined with expectations of a slowdown in the April Consumer Price Index (CPI), has already triggered a notable price surge in Bitcoin and other cryptocurrencies.
On Sunday, U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer announced a successful trade agreement following two days of high-level negotiations in Geneva. Under the agreement, the U.S. will reduce tariffs on Chinese goods from 145% to 30% for a 90-day period, while China reciprocates by lowering tariffs on U.S. goods from 125% to 10% for the same duration. This surprise move boosted Bitcoin prices, pushing it past $105,000.
The agreement marks a shift away from the recent trade war, where both countries had imposed tariffs of over 100%, raising concerns about inflationary pressures globally. Previous U.S. CPI data, which showed rising inflation, was viewed by investors as outdated, given the escalating trade tensions. However, with the de-escalation in tariffs, those concerns have been alleviated, potentially paving the way for more favorable inflation readings.
The upcoming CPI report, due Tuesday, is expected to show a modest decline in the annual inflation rate from 2.4% in March to 2.3% in April, according to RBC. Core CPI, which excludes volatile food and energy prices, is anticipated to remain steady at 2.8%. If these expectations hold true, Bitcoin’s recent rally could gain further momentum.
Markus Thielen, founder of 10x Research, noted that the CPI data could act as a positive catalyst for the market. “If the inflation report aligns with expectations, it could spark further bullish movement for Bitcoin, potentially driving it to new all-time highs,” he told CoinDesk.
Bitcoin’s recent surge follows a near V-shaped recovery from lows around $75,000 in early April, with prices rising 10% last week. This rally has been fueled by sustained inflows into spot Bitcoin exchange-traded funds (ETFs), including BlackRock’s spot Bitcoin ETF (IBIT), which has seen over $5 billion in net inflows during the past 20 trading days, according to SoSoValue data.
The Federal Reserve’s decision to maintain interest rates at 4.25%-4.5% while emphasizing a data-dependent approach to future rate cuts also contributed to the positive sentiment. Fed Chairman Jerome Powell’s remarks, particularly regarding the “good” inflation picture and the short-term nature of tariff-induced inflation, have further reassured markets.
Ether (ETH), the second-largest cryptocurrency, experienced a 39% rise to $2,500 last week, marking its best performance since December 2020. Other major altcoins, including XRP, Dogecoin (DOGE), Cardano (ADA), and Solana (SOL), also saw significant gains, with DOGE surging 56% and ADA rising 19%.
Despite the strong rally, research from HTX points to a stable market environment, with implied volatility in Bitcoin options remaining within a manageable range. This suggests that the rally has not yet reached speculative extremes, leaving room for further upside potential. “As long as yields remain below 4.8% and ETF inflows continue, Bitcoin is likely to trade in the $105,000–$115,000 range, awaiting the next breakout trigger,” HTX added.
As Bitcoin continues its upward trajectory, analysts remain optimistic about the broader crypto market’s potential, with altcoins likely to follow suit. With trade tensions easing and inflationary concerns potentially subsiding, the stage is set for Bitcoin to potentially break new records in the coming weeks.
