Bitcoin price consolidates above $100,000 amid a 'risk-on' market driven by the US-China trade deal, declining inflation, and optimistic investor sentiment indicators.
Key points to remember:
Bitcoin price remains above $100,000, thanks to a 'risk-on' sentiment after the CBOE Volatility Index (VIX) dropped to 20.
The Bitcoin Bull Score Index skyrocketed to 80, and the Fear & Greed Index shows increasing optimism, with historical patterns indicating further bullish potential.
$BTC Price continues to consolidate above $100,000 after the CBOE Volatility Index (VIX) dropped to its 30-year average of 20, down from a peak of 60 earlier in 2025. This decline occurred after the US-China trade agreement on May 12, which implemented a 90-day tariff suspension and reduced tariffs by 115% for both parties.
According to Bitcoin network economist Timothy Peterson, this deal has boosted 'risk-on' sentiment, lifting Bitcoin and stocks as investors shift to higher-risk assets. The analyst stated,
"$VIX dropped significantly yesterday after news of a potential trade deal with China. It is currently at a 'normal' level. This will be a 'risk-on' environment in the near future."
Contributing to the optimistic sentiment, the US Consumer Price Index (CPI) inflation rate fell to 2.3% year-over-year in April 2025, the lowest since February 2021, down from 2.4% in March and below the consensus forecast of 2.4%. This lower-than-expected CPI indicates easing inflationary pressures, potentially increasing the likelihood of the Federal Reserve cutting interest rates in 2025, assuming other economic indicators align.
Considering the current macroeconomic momentum—lower volatility, cooling inflation, and a trade war ceasefire agreement—this creates favorable market conditions for Bitcoin.
Earlier this month, Peterson noted that BTC could reach $135,000 within 100 days, citing the drop in the CBOE Volatility Index (VIX) from 55 to 25, signaling a 'risk-on' environment. With 95% accuracy, his model links low VIX levels to increased investor confidence in riskier assets like Bitcoin.
The Bitcoin Bull Score Index reached its highest level of the year.
After recording one of the least price increases in two years in April, Bitcoin sentiment has changed dramatically to a peak in 2025. Data from CryptoQuant shows that the Bitcoin Bull Score Index has surged from 20 to 80, a level often associated with significant bull runs.
This shift, driven by increased spot demand far exceeding supply, reflects patterns observed after the halving event in April 2024, suggesting Bitcoin may see further price increases.
Similarly, Bitcoin researcher Axel Adler Jr noted that while the Bitcoin Fear & Greed Index is rising, currently at 53.3%, it still remains below the 'overbought' zone above 80%. The analyst discussed the possibility of a 'bull' market, expressing hope for a successful test and surpassing Bitcoin's all-time high of nearly $110,000.
