Mike Smith
10 days ago
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Bitcoin reached an impressive $105,700, reacting to the news of a temporary reduction in trade duties between the world's two largest economies. This jump was short-lived - the quotes returned to around $104,500, reflecting the rapid market reaction to macroeconomic changes.
The reason for the volatility was the announcement of a 90-day suspension of the tariff standoff: during this period, the two sides agreed to significantly relax duties on mutual trade. This triggered an immediate response from the crypto markets, where any signals of stabilisation of the international economic environment are traditionally perceived as favourable conditions for the growth of risky assets.
Analysts attribute the emerging demand for Bitcoin not only to a reaction to a specific transaction, but also to a general reduction in uncertainty, which makes digital assets more attractive to institutional players. According to Jeff May, director of operations at BTSE, such moves could accelerate capital flows towards cryptocurrencies, especially amid expectations of a possible easing of monetary policy. A similar position is held by HashKey Capital, where they see such diplomacy as a factor in increasing confidence in alternative forms of investment.
Nevertheless, not all market participants are so optimistic. A trader under the pseudonym Daan Crypto believes that as soon as the driver in the form of trade tensions disappears, a correction may follow. From his point of view, Bitcoin has gained momentum precisely because of global uncertainty, and its disappearance can temporarily cool interest in the asset.
Technical indicators also show a mixed picture at the moment. According to the observations of Vincent Liu from Kronos Research, Bitcoin is confidently holding above its 50- and 200-day moving averages, which indicates a strong upward momentum. That said, the Relative Strength Index (RSI), as Rachel Lucas of BTC Markets points out, indicates overbought conditions. This may not mean an immediate reversal, but it does signal a possible pause or sideways movement.
Against the backdrop of the main cryptocurrency's surge, some altcoins showed even more pronounced dynamics. Dogecoin and Ethereum grew almost four times stronger than Bitcoin, adding about 40% over the week. This reinforced the view that capital is shifting towards altcoins, a phenomenon traditional for the early stages of a bullish trend.
The rise in Bitcoin's dominance to levels seen before the meteoric rise in 2021 confirms the start of a new market phase. Against this background, Presto Research analysts believe that asset rotation has already begun, and investors are beginning to more actively reallocate portfolios in favour of second-tier coins.
Financial structures also did not stay aside. In a recent forecast, Standard Chartered predicted Bitcoin's growth to $120,000 by the fourth quarter of the year, which adds confidence to those who consider the cryptocurrency as a long-term investment in a changing global economy.
