US-China Tariff Cuts Could Enhance Bitcoin’s Breakout Potential Toward $150,000 Amid Market Optimism

• The recent reduction in tariffs between the US and China has ignited a significant rally in Bitcoin, offering a promising outlook for its price trajectory.

• The consensus among analysts indicates that the easing of trade tensions could enhance liquidity and investment in cryptocurrencies.

• David Ingles from Bloomberg stated, “This trade agreement is pivotal for risk assets, including Bitcoin, as it provides a conducive environment for growth.”

As US-China tariffs drop, Bitcoin soars past $105,700, with projections suggesting a potential rise to $150,000 amidst renewed optimism in the crypto market.

US-China tariffs reduction ignites Bitcoin surge

The recent agreement to cut tariffs is positioned as a significant catalyst behind Bitcoin’s impressive rally. Following months of strife and uncertainty, the negotiations culminated in an agreement that promises to stabilize bilateral trade relations.

During talks in Geneva, US Treasury Secretary Scott Bessent and Chinese Vice President He Lifeng reached a consensus that would lower US tariffs on Chinese imports from 145% to 30% and reduce China’s duties on US goods from 125% to 10%. This momentous deal has not only lifted Bitcoin’s price but has also set a positive tone across global markets.

The ramifications of this agreement extend beyond Bitcoin; with the S&P 500 futures rising by 2.8% and the US dollar appreciating by 0.7%, one can see a broad-based market enthusiasm. Conversely, traditional safe-haven assets like gold fell by 2.3%, reflecting a shift in investor sentiment toward higher-risk assets like cryptocurrencies.

Historically, Bitcoin has thrived in conditions of improved liquidity and investor risk appetite, both of which are reinforced by the current trade truce.

Bullish patterns reveal a $150,000 price target

Bitcoin’s current price surge aligns with a classical bullish setup known as a bull flag breakout. This technical pattern typically indicates a continuation of an upward trend following a brief consolidation phase.

BTC’s flag formation initiated after it reached almost $110,000 in January, with the price stabilizing for several months before breaking out last week. This breakout saw Bitcoin surpass the upper trendline of the flag with an observable increase in trading volume.

Market analysts are optimistic as the projected target of this breakout places Bitcoin’s price near $150,000, calculated by adding the height of the flagpole to the breakout point. This bullish sentiment is further solidified by momentum indicators such as the Relative Strength Index (RSI), which has risen above 65, suggesting healthy buying momentum.

Short-term optimism tempered by sentiment analysis

Despite the excitement, expert opinions caution against herd mentality as Bitcoin’s sentiment reaches notable highs. André Dragosch, Bitwise’s European Head of Research, highlights that the Cryptoasset Sentiment Index has hit levels not seen since November 2024, closely associated with market peaks.

Historically, past sentiment clusters, including those in April 2022 and October 2023, were precursors to corrections or periods of stagnation. This serves as a reminder that while the long-term outlook for Bitcoin remains positive, the short-term landscape may face challenges due to potentially exuberant market sentiment.

As of May 12, Bitcoin’s price was beginning to retrace from its peak above $107,000, with daily RSI levels indicating potential overbought conditions. The next critical support level lies around $100,000, reinforced by its 0.786 Fibonacci retracement line.

Conclusion

The US-China tariff agreement brings a wave of optimism for Bitcoin, pushing its price above $105,700 and indicating a bullish trajectory toward $150,000. However, investors should remain cautious as elevated sentiment may lead to short-term corrections. Monitoring support levels will be key in this volatile market, ensuring strategic decision-making as the cryptocurrency landscape evolves.