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Key takeaways:
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Bitcoin broke above $105,700 after the US and China agreed to slash tariffs.
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A confirmed bull flag breakout on the weekly chart initiatives a $150,000.
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Bitwise’s sentiment index warns of potential short-term overheating.
Bitcoin (BTC) bulls cheered a serious growth within the ongoing US-China tariff talks, with the cryptocurrency climbing over the $105,700 mark on Could 12 for the primary time in 4 months, additional confirming a bullish continuation setup with a $150,000 worth goal.
US-China commerce truce fuels Bitcoin growth
The catalyst behind Bitcoin’s breakout seems to be de-escalating trade tensions between the US and China.
Over the weekend, US Treasury Secretary Scott Bessent and Chinese language Vice President He Lifeng struck a deal in Geneva to cut back tariffs that had crippled bilateral commerce for months.
Below the deal, the US will decrease tariffs on Chinese language items from 145% to 30%, whereas China will cut back its duties on US imports from 125% to 10%.
Associated: US-China trade deal could shed light on Bitcoin’s use case: Trader
The settlement triggered a broad-based market rally, with S&P 500 futures rising 2.8% and the US greenback gaining 0.7%. In distinction, gold dropped 2.3%, signaling a shift away from safe-haven belongings.
Bitcoin, typically seen as a high-beta risk asset, had suffered underneath the burden of the commerce warfare, with elevated investor warning suppressing crypto inflows. The truce now alerts improved liquidity and danger urge for food, circumstances traditionally favorable for BTC rallies.
Bull flag breakout factors to $150K goal
The present Bitcoin rally follows the textbook breakout of a bull flag pattern on the weekly chart, a bullish continuation setup fashioned when the value consolidates downward in a parallel channel after a pointy upward transfer.
In Bitcoin’s case, the flag started forming after BTC peaked at practically $110,000 in January. The consolidation endured for months till early Could when the value broke above the flag’s higher trendline with a slight quantity enhance.
This breakout confirms bullish continuation, with the sample’s projected upside goal now sitting close to $150,000, measured after including the peak of the preliminary flagpole to the breakout level.
Momentum indicators, together with the relative strength index (RSI), are additionally supportive, with weekly RSI rebounding above 65, reflecting renewed shopping for stress with out getting into overbought territory above 70.
BTC might return to $100,000 first
Some analysts are urging warning as Bitcoin’s sentiment is turning into euphoric.
André Dragosch, European Head of Analysis at Bitwise, notes that the agency’s Cryptoasset Sentiment Index has reached its highest degree since November 2024, a degree that beforehand aligned with native market tops.
The chart reveals that previous peaks in sentiment, akin to these in April 2022, October 2023, and November 2024, have been adopted by short-term corrections or sideways worth motion.
This implies rising optimism could also be stretched, elevating the chance of a near-term pullback regardless of Bitcoin’s sturdy long-term outlook.
Bitcoin’s worth was retracing following its climb above $107,000 as of Could 12, with its every day RSI alarming about overbought circumstances.
The following assist goal sits round $100,000, aligning with its 0.786 Fibonacci retracement line.
A decisive drop beneath the extent might have BTC check its exponential shifting common (EMA) helps beneath, with the 20-day EMA (the purple wave) at round 97,385 because the preliminary draw back goal.
This text doesn’t include funding recommendation or suggestions. Each funding and buying and selling transfer includes danger, and readers ought to conduct their very own analysis when making a choice.