Bitcoin Surges 3% to $96,000 on US-China Trade Talk Optimism

Bitcoin experienced a significant rally, reclaiming the $96,000 support level, driven by renewed optimism surrounding potential US-China trade talks. This shift in sentiment was evident across the broader crypto market, with the total market cap climbing nearly 3% to $3.11 trillion and the Crypto Fear and Greed Index rising back to “Greed” at 67, after starting the week in neutral territory. Altcoin markets also showed signs of recovery, with most gains scattered across a handful of prominent projects.

The current momentum in Bitcoin appears to be tied to a wave of fresh geopolitical and macroeconomic triggers. Bitcoin briefly surged to $97,700 during early Asian hours, mirroring gold’s rally to $3,435. Both assets spiked as traders digested reports of renewed US-China trade talks and rising tensions between India and Pakistan, developments that injected volatility across risk markets. The sudden upside followed a sharp dip under $94,000, which marked Bitcoin’s May low. This pullback seems to have reset short-term market structure, allowing bulls to step in aggressively amid improving risk sentiment.

Fueling this shift was a statement from US Treasury Secretary, who confirmed plans to meet China’s Ministry of Commerce to discuss trade barriers. China responded positively, signaling a willingness to engage, which brought in renewed optimism for risk assets like crypto. Although markets remain skeptical, with only a 25% chance of a deal by June, the headlines alone were enough to lift Bitcoin and other major assets. Adding to the pressure on short sellers, over $83 million in BTC short positions were liquidated in the past 24 hours, outpacing long liquidations by a wide margin.

Traders remain cautious but engaged, with all eyes on Chair Jerome Powell’s comments post-announcement. His tone and forward guidance could shape risk appetite in the days ahead for the entire asset class. For now, a major crash seems unlikely, but the road ahead could get bumpy. Market watchers are closely eyeing the Federal Reserve’s next moves, with traders increasingly doubtful about any near-term rate cuts. For Bitcoin, that means more volatility ahead, not necessarily a breakdown, unless sentiment flips sharply or macro conditions worsen.

Ask Aime: Could the recent Bitcoin rally be signaling a shift in market sentiment amidst US-China trade talks?

According to analyst Rekt Capital, the recent rebound may have put an end to Bitcoin’s “Downside Deviation.” In a weekly chart, the analyst pointed out a recurring pattern where BTC wicks below key support levels before resuming its uptrend. The latest recovery back above $96,000 fits that structure neatly, suggesting bulls may have regained control. Meanwhile, fellow analyst Crypto Caesar pointed out that the upper CME gap around $97,000 has now been filled. Clearing this gap removes a major resistance area, potentially opening the door for a cleaner move toward six figures if bullish momentum continues.

Adding to the optimism, pseudonymous commentator The Crypto Monk believes Bitcoin is now prepping for its “next leg up,” eyeing a run at all-time highs. Yet not everyone is convinced. Scott Melker, also known as The Wolf of All Streets, offered a tongue-in-cheek reminder that Bitcoin has a history of sharp pullbacks, even in bullish cycles. Referencing the 2021 pattern, he noted that a similar drop to the monthly 50-day moving average could theoretically drag BTC back to $49,000. However, he added that the chances of that happening were relatively low.

In the past 24 hours, the total altcoin market rose 7.8%, hitting an intraday high of $1.24 trillion before cooling off to $1.18 trillion. The Altcoin Season Index showed a score of 26, meaning Bitcoin is still calling the shots, with most altcoins’ prices mainly following the lead of the top crypto. Ethereum (ETH), the biggest altcoin, was up about 3% during the period, trading at a bit over $1,800. Other large-cap coins like Solana (SOL), Dogecoin (DOGE), Cardano (ADA), and Sui (SUI) also posted small gains of around 2-3%. Most of the top 100 cryptos were in the green too. Stacks (STX) and EOS (EOS) stood out with double-digit gains of 14.5% and 13.6%, while Story (IP) was up over 8%.

Analysts believe some early signs for the start of the next altcoin season could be emerging. In a May 7 post, crypto analyst Moustache highlighted an ascending broadening wedge forming on the Market Cap USDT Dominance chart, noting that a similar pattern breakdown in November 2024 triggered a strong altcoin rally. “The signs of an impending altcoin season are getting closer and closer,” Moustache wrote. Trader Michaël van de Poppe agreed, saying the altcoin market looks like it’s in an accumulation phase right now, similar to what happened before last November’s altcoin rally.