A geopolitical respite boosts the crypto market

The crypto ecosystem has once again demonstrated its sensitivity to macroeconomic and geopolitical winds. This week, Bitcoin (BTC) broke the psychological barrier of $105,000, its highest level in nearly four months, following the historic trade agreement between the United States and China. However, as is typical in volatile markets, the initial enthusiasm gave way to a technical correction, with profit-taking that led BTC to fall to $103,000.

This move reflects a classic pattern: investors react to positive news with aggressive buying, but then lock in profits amid potential uncertainty. Now, the focus is shifting to two key factors: the upcoming US CPI data and the Federal Reserve's (Fed) monetary policy signals.

The historic agreement between China and the US sparked a crypto rally that took Bitcoin above $105,000. However, enthusiasm is cooling, and profit-taking is emerging.

Bitcoin and altcoins: Rally, correction, and opportunities

BTC: Volatility with bullish support

  • Peak and adjustment: After weeks of sideways movement, Bitcoin climbed to $105,300 (Binance) driven by global optimism, but then corrected to $103,300. This volatility is normal in accumulation cycles prior to possible breakouts.

  • Institutional support: Spot ETFs, such as BlackRock’s IBIT, have accumulated $5 billion in net inflows over 20 days (SoSoValue), signaling long-term confidence.

    Altcoins: Fervor and Natural Selection

    • Mixed performance: While XRP (+7%) and Hedera (+3.8%) are holding up, others such as Chainlink (-2.2%) and Hyperliquid (-1.8%) are retreating. This suggests a more selective market, where projects with solid fundamentals are raising capital.

      ETH consolidates: Ethereum remains stable at $2,400, supported by expectations of spot ETF approvals and network upgrades.

    The trigger: US-China truce and its impact on liquidity

    The agreement reached in Switzerland – which reduces bilateral tariffs from 145% to 30% (US) and from 125% to 10% (China) – has injected relief into global markets:

    • Psychological effect: Cryptocurrencies, as risk assets, tend to benefit from stable geopolitical environments.

    • Liquidity in action: Javier Molina (eToro) highlights that the low supply of BTC on exchanges (7-year lows) and injections from the US Treasury create a favorable scenario for increases, although with vulnerability to negative data.

    The Next Catalyst: Inflation and the Fed

    CPI under the microscope

    The April data (published this Tuesday) will be key:

    • Expectations: A year-over-year slowdown to 2.3% is projected. If confirmed, this would reinforce the narrative of controlled inflation, paving the way for possible rate cuts in 2024.

    • Possible scenario: Markus Thielen (10x Research) suggests that a favorable CPI could lead Bitcoin to new all-time highs, provided trade tensions do not resurface.

    The Fed: Caution with bullish hints

    • Jerome Powell kept rates unchanged in April, but avoided committing to immediate cuts.

    • Market pressure: Investors are waiting for clear signs of monetary easing, which could revive interest in riskier assets like cryptocurrencies. #CryptoRegulation

    Risks and opportunities in the short term

    Signals to monitor

    • Profit-taking: 5-10% corrections are healthy on extended rallies. Key levels: $100,000 (psychological support) and $98,000 (200-day moving average).

    • Strategic Altcoins: Projects with real use cases (e.g., DeFi, RWA tokenization) could excel in a more rational market phase.

    The role of institutional narrative

    • ETF flows and BTC accumulation by funds (e.g., MicroStrategy added 25,000 BTC in Q1) support the bullish thesis.

      Towards a new bullish cycle?

      Bitcoin's rally after the trade truce is a reminder of itssensitivity to macroeconomics. Although the current correction may extend, factors such asa favorable CPI, abundant liquidity and institutional adoptionThey point to a scenario where$120,000 seems like a realistic goal in 2024.

      Key for investors: Maintain a balanced strategy—taking advantage of BTC/ETH dips and selecting fundamental altcoins—while monitoring developments in the Fed and economic data.

      Are we facing a technical pause or the prelude to a new ATH? The market will give its verdict in the coming weeks, but the foundations for a sustained rally appear to be there.