Bitcoin (BTC) could be on the cusp of a record high rally, potentially surging above $110,000 as easing U.S.-China trade tensions boost market sentiment. This could push altcoins high too, as markets react to a potential April Consumer Price Index (CPI) slowdown this week.
In a stunning turn of events, the U.S. and China reached a trade deal after two days of high-level negotiations in Geneva.
BREAKING: U.S. Announces China Trade Deal in Geneva pic.twitter.com/JjgvYAvAGe
— The White House (@WhiteHouse) May 11, 2025
U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer confirmed the agreement on Sunday. This breakthrough follows weeks of a heated trade war, where both nations jacked up import tariffs by over 100%, threatening to drag inflation through the roof globally. The positive March CPI data was pretty much ignored by investors, who saw it as outdated given the escalating trade spat.
But now, thanks to this deal, the bears can’t use that excuse anymore.
A continued drop in the CPI could fuel bets on a Fed rate cut, potentially pushing Bitcoin into a rally, with BTC possibly reaching new all-time highs above $110,000. On the flip side, a hotter-than-expected CPI might be dismissed as outdated data that doesn’t reflect the easing of trade tensions.
Positive CPI Data and ETF Inflows Could Spark Bitcoin’s Next Big Move
The CPI due Tuesday is expected to show a slight easing to 2.3% year-over-year in April from March's 2.4%, with the core CPI holding steady at 2.8%. RBC anticipates continued moderation in rent inflation, signaling a positive trend.
Markus Thielen, founder of 10x Research, predicts that if the CPI holds steady, the market will likely see the report as a positive catalyst. "If the data is good, Bitcoin might hit new all-time highs".
Bitcoin, at around $104,500, is on the brink of new highs past $109,350. BTC has recorded a near V-shape recovery since early April after increasing by 10% last week, owing to consistent inflows in spot exchange-traded funds (ETFs).
BlackRock’s spot Bitcoin ETF (IBIT) has had an impressive 20 straight trading days of net inflows, bringing in over $5 billion, according to SoSoValue data. Meanwhile, the Federal Reserve kept interest rates steady last week, holding the benchmark borrowing rate in the 4.25%-4.5% range, while Chairman Jerome Powell gave dovish hints, suggesting inflation pressures from tariffs would be short-lived.
Ethereum (ETH), the world's second-largest altcoin in terms of market capitalization, jumped an impressive 39% last week to $2,500, a price last seen in December 2020. Some of the other major alts like XRP, DOGE, ADA, and SOL also jumped by impressive amounts of 9.7%, 56%, 19%, and 20%, respectively.
Despite the positive movement, HTX Research points out that we haven’t seen signs of speculative mania yet.
"Implied volatility in Bitcoin options is still stable around 50%-55%, far below the extreme 80%+ levels typical of past bull markets. The CME Bitcoin futures open interest is still manageable at $14.8 billion, compared to $20 billion during the 2020 Trump election period," said HTX Research.
As long as yields stay below 4.8% and ETF inflows remain strong, Bitcoin is likely to continue its consolidation in the $105,000–$115,000 range while waiting for the next big breakout.
HODL Team
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