Bitcoin (BTC) grabbed the headlines on May 12, 2025, by rising above the psychological resistance of $105,000, driven mainly by macroeconomic events—most significantly, a 90-day tariff cut agreement between the United States and China. This surprise relaxation of trade tensions over the weekend has hugely supported world markets and renewed investors’ confidence, especially in risk-on assets such as cryptocurrencies.
Reporting CoinDesk, Barron’s, and The Economic Times, temporary respite of the current trade war between the two largest world economies has worked like a refreshing elixir to investor confidence. The virtual currency market that had remained inactive in the previous fortnight underwent a sudden reverse with Bitcoin pulling the entire trend upward.
This deal has significant short-term tailwind for digital currencies,” says Edward Liang, head strategist at MetaEdge Capital. “The price action in Bitcoin is a direct indicator of risk appetite coming back into the market.
The agreement involves a rollback of some import tariffs, better terms for technology and energy imports, and an agreement by both nations to review their wider trade framework within the 90-day period. The timing could not have been more opportune for Bitcoin, which had been stuck around $98,000 for the last two weeks, resisting at $100,000.
With the news, Bitcoin promptly crossed $102,000, and by Monday morning, it crossed $105,000 on big exchanges. The market data across Binance, Coinbase, and Bitfinex validated extremely elevated trading volumes from institutional investors as well as the Asian markets.
“This isn’t just a retail-driven rally,” noted analyst Priya Menon of DigitalGate Research. “We’re seeing long-position accumulation by funds and hedge managers who have likely been waiting on the sidelines for a macro catalyst.”
Despite the celebratory mood among crypto bulls, not all analysts are convinced this rally will sustain. Some are already issuing warnings about short-term corrections and overextended momentum indicators.
This surge appears promising, but technical patterns indicate that Bitcoin is possibly overbought short term,” warned BlockBridge Capital senior trader Jamie Wu. “We might witness a healthy pull back towards the $95,000–$98,000 range before any plunge towards $200,000 is plausible.
These are echoed by several analysts throughout CoinDesk and Barron’s, who point out that although the macro environment is favorable, the crypto market is still extremely vulnerable to speculative fluctuations. Liquidity, order book depth, and geopolitical risk continue to influence Bitcoin’s price action.
Moreover, some experts are urging investors to keep an eye on U.S. Federal Reserve policy. Should inflation metrics climb again or if rate hikes resume, risk assets—including Bitcoin—could face renewed downward pressure. “Bitcoin thrives in an environment of fiscal leniency and market optimism. If either of those shift, we’ll likely see that reflected in price action,” said Rachel Thomas, economist at ChainMacro.
In the meantime, other cryptocurrencies also gained from the upbeat sentiment. Ethereum (ETH) rose more than 5%, to almost $2,600, while Solana (SOL) and Dogecoin (DOGE) posted modest gains. Bitcoin’s dominance in the market capitalization index, however, rose slightly, which means that this rally was largely a Bitcoin-driven rally.
In the longer term, the mood is still bullish. Recent performance by Bitcoin and increased institutional acceptance have led some analysts to stick to their aggressive targets. Forecasts for Bitcoin hitting $150,000 or even $200,000 by the end of the year are going around again—though these come with fence-sitting disclaimers.
“$200,000 in the next 6–9 months is feasible,” CryptoSigma founder Arthur Ng said. “But we require stable macro support and no black swan. Otherwise, buckle up for volatility.”
While the crypto market readjusts to this surprise bullish momentum, everyone will be watching the U.S.–China trade talks, Federal Reserve pronouncements, and international equity markets. Whether Bitcoin’s recent breakout will prevail—or collapse—will probably hinge on what transpires next in the geopolitics and macroeconomics.
