Bitcoin Nears Record High as U.S.–China Trade Deal Boosts Market Sentiment

NexxtGen Markets
5 days ago
5 min read

Bitcoin appears poised to break fresh record highs this week, as the world’s largest cryptocurrency rides a wave of bullish sentiment fuelled by a landmark U.S.-China trade agreement and expectations for a cooling in inflation data. With the April CPI reading due on Tuesday and broader markets already responding positively to signs of de-escalation in global trade tensions, analysts are now eyeing a potential breakout for BTC above the $109,000 mark.

Trade Breakthrough Rekindles Risk Appetite

After months of mounting economic friction between Washington and Beijing, a significant breakthrough was announced over the weekend. U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer confirmed that both nations reached a trade agreement following two days of negotiations in Geneva. This deal will see U.S. tariffs on Chinese imports sharply reduced from 145% to 30% — a dramatic easing of one of the most contentious economic stand-offs in recent history.

The agreement marks a turning point in a tariff battle that had significantly disrupted global supply chains, triggered capital flight from emerging markets, and stoked fears of stagflation. The tit-for-tat escalation had seen both countries hike duties above 100%, with ripple effects threatening inflation stability worldwide. Investors had largely written off March’s positive inflation print as irrelevant in the context of accelerating trade risks.

But with this fresh accord now signed, those inflation fears may begin to recede. The revised tariff framework not only provides breathing space for multinational companies but may also bolster consumer sentiment, manufacturing output, and cross-border investment flows.

CPI in Focus: The Next Big Catalyst

Against this backdrop, all eyes are now on Tuesday’s U.S. Consumer Price Index (CPI) report — a key data point that could determine whether the Federal Reserve pivots more decisively toward monetary easing.

Consensus estimates suggest a slight deceleration in price pressures. RBC forecasts April’s headline CPI to come in at 2.3% year-on-year, a modest decline from 2.4% in March. The month-on-month figure is expected at +0.3%. The core CPI — which strips out volatile food and energy components — is projected to remain stable at 2.8% year-on-year, underpinned by easing rental inflation.

However, market participants are increasingly of the view that any upside surprise in Tuesday’s print may be dismissed as backward-looking. According to Markus Thielen, founder of 10x Research, investors will likely discount any hotter-than-expected figure as a reflection of early-April tariffs, rather than a true indication of persistent inflationary pressure.

“If the headline CPI holds at 2.3% or even 2.4%, that may be enough to encourage the market. It removes immediate concerns about inflation re-accelerating, especially now that tariffs are being rolled back,” Thielen told CoinDesk.

He added: “This week’s inflation data could be the bullish catalyst that pushes Bitcoin to a new all-time high. If CPI is soft, we may finally see BTC breach the $110,000 level.”

Bitcoin Nears Breakout — Just 3.6% Off Highs

Bitcoin is currently trading around $105,500 — just 3.6% shy of its record high of $109,350, according to CoinDesk data. The cryptocurrency has staged a remarkable recovery from its April low near $75,000, registering a near-V-shaped rebound driven by a mix of macro tailwinds and continued inflows into spot Bitcoin exchange-traded funds (ETFs).

Last week alone, BTC surged over 10%, buoyed by the positive inflation outlook, strong ETF demand, and speculation that the Fed could begin cutting interest rates as early as July. ETF flows have been robust, with several institutional vehicles posting record daily inflows — a trend that shows no signs of slowing.

Moreover, with the Nasdaq and other tech-heavy indices bouncing back in tandem, there’s clear evidence of risk-on appetite returning to the broader market. This cross-asset optimism bodes well for digital assets, which often mirror sentiment in high-growth equity segments.

What’s Driving Institutional Demand?

The strength of recent Bitcoin ETF flows has reinforced the thesis that institutional adoption is entering a new phase. Not only have large-cap funds like BlackRock’s iShares Bitcoin Trust seen strong inflows, but there's growing interest in theme-based smart portfolios as well.

One such product is eToro’s BitcoinWorldWide Smart Portfolio, which offers exposure not only to Bitcoin itself but to a curated basket of companies embedded in the crypto value chain. These include:

$COIN (Coinbase Global Inc)
$CME (CME Group)
$BLK (BlackRock Inc)
$RIOT (Riot Platforms Inc)
$MARA (Marathon Digital Holdings Inc)
$XYZ (Block Inc)

The portfolio is designed to benefit from both direct appreciation in Bitcoin and the broader commercial infrastructure that supports it — from miners and exchanges to financial services firms with crypto integration. With a $500 minimum investment, it offers retail and institutional investors alike a strategic on-ramp into the next phase of digital asset adoption.

Policy Outlook: Rate Cuts Back on the Table?

Should Tuesday’s inflation data meet expectations — or surprise to the downside — the Federal Reserve may find itself with fresh latitude to begin discussing rate cuts more seriously. Markets currently price in a 58% probability of a rate cut by September, according to CME FedWatch Tool data.

Lower rates could act as rocket fuel for Bitcoin and other risk assets. With yields on U.S. Treasuries already easing and real yields back below 2%, capital may continue rotating into alternative assets, especially those with inflation-hedge characteristics.

In this context, Bitcoin’s scarcity narrative is gaining renewed traction. With just one halving cycle behind it and institutional interest accelerating, many analysts argue that the crypto asset could become a core component of diversified portfolios in the years ahead.

Final Thoughts

With a pivotal inflation reading on deck and trade tensions cooling dramatically, Bitcoin finds itself on the cusp of another historic breakout. A favourable CPI number could see BTC push beyond $110,000 in the coming days, while continued ETF flows and smart portfolio allocations provide a robust foundation for long-term growth.

Investors should watch closely. As traditional markets reprice the Fed’s next move and global trade conditions improve, Bitcoin may once again lead the charge into the next cycle of risk-on performance.

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