Bitcoin Surges 4% to $110,251 on US-China Trade Talks, Drops 1%

Bitcoin (BTC) began the week with a strong bullish momentum, breaking through its trading range and surging past $110,000 to settle at $110,251. However, this upward trend was short-lived as buyer fatigue set in, allowing sellers to regain control and drag the price back below $110,000. Despite this decline, the flagship cryptocurrency remains up nearly 2% in the past 24 hours, trading around $109,275.

Bitcoin's recent rally was driven by several factors, including the easing of trade tensions between the US and China. Negotiations resumed in London, with markets hopeful of a deal that could reduce tariffs and ease export restrictions. This external driver, combined with on-chain indicators, contributed to Bitcoin's surge past $110,000. CryptoQuant contributors highlighted that Bitcoin reserves on centralized exchanges have dropped significantly, indicating long-term holding patterns as investors move their assets offline for storage. This reduction in supply has pushed prices higher.

However, the rally faced resistance as selling pressure intensified. BTC lost momentum on Tuesday, falling 0.44% to $105,436. Sellers retained control on Wednesday as the price dropped almost 1%, slipping below $105,000 and settling at $104,752. Bearish sentiment intensified on Thursday as BTC plunged 3%, falling to a low of $100,424 before settling at $101,614. Despite the overwhelming selling pressure, BTC recovered on Friday, rising nearly 3% and moving to $104,378. Price action remained positive over the weekend as BTC rose 1.15% on Saturday and 0.20% on Sunday to reclaim $105,000 and settle at $105,784. Bullish sentiment intensified on Monday as BTC surged over 4%, surging past the 20-day SMA and $110,000 to settle at $110,251. The current session sees the price down over 1%, trading around $109,098. With buyers losing momentum, BTC could continue declining and settle around $105,000.

Analysts have predicted the US Consumer Price Index (CPI) to rise 0.3% month-over-month and 2.3% year-over-year. Meanwhile, Core CPI, which excludes food and energy, is expected to rise 0.3% month-over-month and 2.9% year-over-year. A jump in inflation could reduce the possibility of a Fed rate cut, adding pressure to an already volatile market. More conservative estimates predict a correction before a push higher, expecting CPI data to trigger more volatility in the market.