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Bitcoin Breaks $105,000 as Truce Between US and China Sparks Market Optimism

Bitcoin Breaks $105,000 as Truce Between US and China Sparks Market Optimism

BeInCryptoBeInCrypto2025/05/12 01:40
By:Abiodun Oladokun

Bitcoin hit $105K after the US and China reached a tariff deal, with bullish sentiment reflected in market indicators. However, bearish signals from the Chaikin Money Flow suggest potential price corrections.

Today, Bitcoin’s price surged above $105,000, following a major breakthrough in US-China trade negotiations. The king coin hit a price high of $105,705 as trading activity surged across the financial markets. 

Although it has since witnessed a slight pullback, bullish pressure remains strong across BTC’s spot and derivatives markets, indicating the likelihood of a sustained price rally.

BTC Hits $105,000 Amid US-China Trade Deal

On Monday, the two economic superpowers, the US and China, announced a 90-day tariff relief deal, which sparked renewed optimism across global markets. As part of the agreement, the United States will lower tariffs on Chinese imports from 145% to 30%, while China will reduce tariffs on US goods from 125% to 10% over the same period.

The announcement triggered a spike in trading activity in the crypto market, pushing BTC’s price above the psychological $105,000 mark for the first time in weeks. Moments later, the coin peaked at $105,705 and witnessed a decline.

While its price has since dipped to trade at $104,397 at press time, on-chain indicators signal a huge bullish presence across the markets.

For example, the coin’s Long/Short Ratio reflects the bullish bias toward it in the futures market. At press time, this stands at 1.07.

Bitcoin Breaks $105,000 as Truce Between US and China Sparks Market Optimism image 0BTC Long/Short Ratio. Source: Coinglass

This ratio compares the number of long positions (bets that the price will rise) to short positions (bets that the price will fall) in a market. When its value is less than one, traders are betting on an asset’s price drop. 

Conversely, when an asset’s Long/Short Ratio exceeds 1, it indicates that there are more long positions than short, suggesting that traders are primarily betting on a price increase.

This suggests that the market sentiment is largely bullish among BTC’s future traders, and traders expect a sustained price increase in the short term.

Further, the trend in the coin’s options market, where demand for call contracts has surged, supports this bullish outlook. 

Bitcoin Breaks $105,000 as Truce Between US and China Sparks Market Optimism image 1BTC Options Open Interest. Source: Deribit

When the demand for call options exceeds that for puts in the coin’s options market, it signals a growing bullish sentiment, with more traders betting on upward price movement.

Bitcoin’s Surge Faces a Test

This increase in bullish derivatives activity often reflects a broader expectation of rising prices among BTC investors. If buying pressure is sustained, the coin could climb back above $105,000. If the potential support at $105,668 holds, it could push BTC toward its all-time high of $109,312.

However, on the daily chart, BTC’s Chaikin Money Flow (CMF) has begun to drop, forming a bearish divergence with its price. 

A divergence emerges when an asset’s price moves in one direction, but an indicator like the CMF moves in the opposite direction.

Bitcoin Breaks $105,000 as Truce Between US and China Sparks Market Optimism image 2BTC Price Analysis. Source: TradingView

In this case, while BTC’s price is climbing, the CMF is dropping, signaling a decrease in buying pressure. If this continues, BTC’s price could fall to $101,070.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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