US-China Trade Truce Triggers Powerful Bullish Impulse

Bitcoin price today soared to a new 90-day peak right after the United States and China announced a truce in their trade war, bringing relief to global markets. Amid favorable geopolitical news and massive institutional buying, the first cryptocurrency stands just 3.2% away from its all-time high, threatening an unprecedented wave of short position liquidations on derivative markets amounting to $2 billion.

Optimism Returns to Cryptocurrency Markets

As United States & Chinese officials are calling a 90-day truce on each other’s goods, market sentiment quickly shifted to cheerful. Crypto’s Fear & Greed Index now points to 70, a quarterly sentimental peak, as crypto market participants are no longer fearful.

“The trade agreement between the US and China has far-reaching implications for global markets, including cryptocurrencies,” comments Anna Sokolova, Chief Analyst at investment firm Blockchain Capital. “Reduced geopolitical tensions between the world’s two largest economies create a favorable environment for risk assets, which includes Bitcoin.”

Indeed, crypto’s showpiece asset clinched the $100K threshold on May 8, 2025, and hasn’t looked back so far. Getting back to the desired three-zero territory, Bitcoin (BTC) saw massive crypto whale inflows in recent days.

Institutional Investors Ramp Up Positions

To illustrate, MicroStrategy’s CEO Michael Saylor just bagged another 13,390 Bitcoins (BTC) at an average price of $99,856. Namely, this happened between May 5, 2025, and May 11, 2025, boosting the tech company’s Bitcoin balance to 568,840, according to LookOnChain data.

“Saylor’s strategy has proven to be one of the most successful corporate investment decisions in the past decade,” notes Dmitry Volkov, a cryptocurrency expert and founder of the analytical platform CryptoView. “MicroStrategy has essentially transformed from a software company into a proxy ETF for institutional investors looking to gain exposure to Bitcoin through traditional financial instruments.”

This latest purchase underscores growing institutional investor confidence in the long-term prospects of the first cryptocurrency, despite significant price appreciation in recent months. Many analysts see this as confirmation of the thesis about Bitcoin as an effective hedge against inflation and geopolitical instability.

How Bitcoin Price Today Caught Bears Off-Guard

As Bitcoin (BTC) enjoys this monumental rally, short-selling crypto market participants get hit with a tsunami of liquidations. However, the worst for crypto bears is yet to come if Bitcoin price today scorches to a new all-time record.

With a 3.2% distance to a new all-time high, BTC price could trigger a mouth-dropping $2 billion in short position liquidations on Derivatives markets. In the latest 24-hour window, the stats have been brutal for Bitcoin’s (BTC) short-sellers with $57 million in over-leveraged liquidations.

“We’re witnessing a classic short squeeze scenario,” explains Alex Petrov, a trader with experience in cryptocurrency derivative platforms. “When an asset’s price rises rapidly, traders who’ve taken short positions are forced to close them, creating additional buying pressure and further fueling the upward movement. This can create a self-reinforcing cycle that leads to parabolic price growth.”

However, the CoinGlass leveraged position liquidity data shows that a grandiose liquidation of $2 billion is yet to come if crypto bulls keep buying Bitcoin (BTC). Presently, this is not the case due to the Chaikin Money Flow (CMF) flashing figures below zero, as depicted in the chart.

Technical Analysis: Signs of a Sustainable Rally

On a brighter note, the fact that Bitcoin price today is trading above the 200 Exponential Moving Average (EMA) line serves as a good sign of a sustainable rally. Depicted in blue, the 200-EMA metric smooths trading averages over the cumulative period of 200 days, but basing BTC price predictions on it alone could be misleading.

To clear that up, technical crypto traders can employ additional research instruments like the Parabolic Stop & Reverse (SAR), which works well with the 200-EMA. On the other hand, the roller-coaster ride of global crypto & stock markets is highly dependent on geopolitical factors, which don’t necessarily take on-chain signs into consideration.

“While technical indicators provide valuable information, it’s important to remember that macroeconomic and geopolitical events often have a more significant impact on Bitcoin’s price in the short term,” cautions Maria Ivanova, a certified technical analyst and author of “Cryptocurrency Trading: From Theory to Practice.” “The current growth can only be sustainable with steady institutional capital inflow and a favorable regulatory environment.”

Outlook and Potential Risks

If Bitcoin breaks through its previous all-time high, it could lead to a new wave of FOMO (fear of missing out) among retail investors, further fueling the price rally. However, the market also faces several potential risk factors.

First, the likelihood of profit-taking by large holders after reaching a new all-time high could lead to a temporary correction. Second, while the truce between the US and China is a positive factor, it is limited to a 90-day period, and any signs of renewed trade tensions could quickly change market sentiment.

Finally, upcoming Federal Reserve monetary policy meetings remain a key uncertainty factor. Any hints of tighter-than-expected policy or delays in expected interest rate cuts could negatively impact risk appetite across all markets, including cryptocurrency.

Despite these risks, the current Bitcoin price dynamics and improving macroeconomic conditions create a favorable environment for further growth in the near term. As we approach a new all-time high, all eyes will be on the potential wave of short position liquidations that could catapult the price of the first cryptocurrency to new heights.