On May 21, Bitcoin reached a new all-time high of $109,400, marking a 26% increase over the past month. This surge followed the announcement of a 90-day trade agreement between the U.S. and China on May 12, which temporarily reduced import tariffs to 10%.
The trade agreement eased macroeconomic fears and boosted investor confidence, according to Aurelie Barthere from Nansen. This agreement mitigated the risk of sudden trade escalations, positively influencing both traditional and cryptocurrency investors.
Bitcoin's recovery began around April 9, after experiencing a year-to-date low of $74,434 on April 7, triggered by Trump's tariff announcements on April 2. Jag Kooner of Bitfinex noted that geopolitical de-escalation and improving regulatory optics further catalyzed Bitcoin's rise in May.
The easing of geopolitical tensions, including Russia-Ukraine ceasefire talks, unlocked a risk-on rotation, driving capital into Bitcoin and high-beta tech. Analysts predict a potential rally above $114,000 to $120,000 if funding rates remain neutral and open interest stable.
Jamie Coutts from Real Vision suggests that the increasing money supply could push Bitcoin's price above $132,000 by the end of 2025. This is driven by growing investor demand amid fiat money debasement.
This article is based on our author's analysis of materials taken from the following resources: Cointelegraph, TradingView.