Bitcoin Hits $109,400 All-Time High After US-China Trade Deal

Bitcoin surged to a new all-time high of $109,400 on May 21, marking a significant milestone in the cryptocurrency market. This surge came after a temporary trade agreement between the United States and China eased macroeconomic fears and boosted investor confidence. The agreement, announced on May 12, included a 90-day suspension of import tariffs, reducing them to 10%. This development had a profound impact on risk appetite among both traditional and cryptocurrency investors, removing the risk of sudden re-escalation in trade tensions.

The temporary tariff suspension and the cooperative tone in negotiations significantly influenced market sentiment. Aurelie Barthere, principal research analyst at a crypto intelligence platform, noted that the removal of the threat of sudden re-escalation had a substantial impact on investor confidence. This shift in sentiment was particularly notable given that US President Donald Trump’s reciprocal tariffs had been seen as the biggest macroeconomic threat to traditional equities and cryptocurrency markets in 2025.

Bitcoin's price had briefly fallen to a year-to-date low of $74,434 on April 7, just five days after Trump announced his reciprocal import tariffs on April 2. This announcement sent shockwaves across global markets, with significant losses in traditional equities. However, Bitcoin began its recovery on April 9, marking the climax of uncertainty for market participants. This recovery was further catalyzed by the temporary trade agreement and the easing of geopolitical tensions.

Bitcoin entered May with a "near-flawless setup," driven by a rare alignment of geopolitical de-escalation, improving regulatory optics, and macroeconomic tailwinds. Jag Kooner, head of derivatives at a cryptocurrency exchange, highlighted that the Russia–Ukraine ceasefire talks had defused one of the primary geopolitical volatility engines of the past two years. This easing allowed for a risk-on rotation, with capital flowing into Bitcoin and high-beta tech sectors as the need for geopolitical hedging faded but liquidity remained abundant.

Kooner noted that this capital rotation reflected a maturing narrative, where Bitcoin is no longer just a fear hedge but increasingly a high-conviction risk asset in periods of macro stability. The easing of geopolitical tensions and the temporary trade agreement created an environment conducive to Bitcoin's price surge. However, for a consecutive setup that could ignite a further rally to above $114,000 to $120,000, funding rates need to remain neutral and open interest stable. This rally could be catalyzed by any macro or regulatory spark.

Other analysts have predicted a Bitcoin rally to above $130,000 before the end of 2025, based on BTC’s close correlation with the global money supply. The increasing money supply may push Bitcoin’s price above $132,000 before the end of the year, as investor demand is driven by the growing fiat money debasement. This prediction underscores the potential for further price appreciation as macroeconomic conditions continue to favor risk assets.