Bitcoin’s $100K breakthrough signals a bullish trend, fueled by easing inflation and trade agreements, but rate cut expectations remain key.
Bitcoin’s break above the $100K level has the bulls excited since it has achieved that milestone despite an uncertain macroeconomic environment.
On the flip side, however, bears are concerned about the asset’s ability to sustain its recent gains in the wake of that challenging backdrop.
All in all, investors now face a tough decision: is it time to buy, sell, or simply hold BTC?
Economic Tailwinds and Fed Rate Cut Expectations
A key catalyst for Bitcoin’s recent push is softer-than-expected U.S. inflation data.
The Consumer Price Index (CPI) report showed lower numbers than analysts anticipated. Consequently, this eased worries about long-term inflation and sparked renewed optimism that the Federal Reserve may soon pivot to rate cuts.
Besides that, geopolitical developments have added further fuel. The United States and China have recently reached an agreement to temporarily lighten the trade tariffs.
For 90 days, the U.S. tariffs on Chinese imports will be reduced from 145% to 30 percent, while China reduces its retaliatory levy from 125% to 10%. This truce has calmed down the market anxiety on disruptions in global trade and propelled risk assets such as Bitcoin to move upwards.
However, caution still looms. Although optimism exists, the Federal Reserve is in the inflation control mode. Analysts believe that the Fed will need more economic weakness for it to take decisive action. In the meantime, traders seem willing to wager that rate cut may be in the offing.
Technical Trends Support Bullish Case
Technically, Bitcoin has just closed a huge CME gap which is usually followed by huge price movements. This development which has caught the attention of market watchers brings with it a hint of the new leg up to $108,000.
At writing Bitcoin is trading near to $104,000 with a 7.2% increase week to date.
The Relative Strength Index (RSI) is at 70.56, indicating overbought conditions. This may indicate a temporary retrace, but it’s a confirmation of bullish continuation if it remains strong above this level.
In addition, the MACD reveals increasing positive momentum. With the MACD line above the signal line, with no indication of reversal yet, the momentum remains strong for traders. This technical optimism correlates with larger macroeconomic trends too.
Conclusion: Is it Worth Buying BTC at Current Levels?
Analyst ColinTCrypto revealed Bitcoin correlation with the Global M2 money supply, boosting the bullish sentiment.
He observed that the current rally is similar to the previous one, when BTC increased from $76,000 to $105,000 between 8 April and mid-May, coming close to the $109,000 all-time high.
Focusing on the way Bitcoin echoed the Global M2 trend, Colin’s BTC prediction sees a potential breakout to more than $120,000 by the end of May, which would mean a new all-time high for Bitcoin.
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