Bitcoin extended its upward momentum and was trading around $104,000 as of late Sunday night after breaking through the key $100,000 mark, the first time Bitcoin has broken through this important psychological level in months.
Bitcoin is on track to hit new all-time highs, analysts say, although the possibility of a short-term price correction remains.
According to The Block's Bitcoin price page, Bitcoin prices have remained stable over the past 24 hours, at $103,926, down 0.12%. Earlier in the day, Bitcoin briefly surpassed $105,000.
Currently, Bitcoin is still about 4.5% away from its all-time high of $108,786 set in January this year.
"Bitcoin is currently hovering near its all-time highs, with strong technical momentum and prices above its 50-day and 200-day moving averages," said Vincent Liu, chief investment officer at Kronos Research. "Continued institutional investment and optimistic expectations for 2025 pave a reasonable path for another hit to new all-time highs."
However, analysts noted that Bitcoin’s relative strength index (RSI) is already in “overbought” territory.
“This does not necessarily mean that prices will reverse immediately, but it does increase the likelihood of a short-term correction or sideways movement,” said Rachael Lucas, an analyst at BTC Markets. “If Bitcoin can pull back and hold the key psychological level of $100,000, it will be a healthy sign and may also lay the foundation for subsequent gains.”
Analysts believe that the recent sustained rise of Bitcoin is mainly driven by external macro factors, especially the optimism brought about by the improved prospects of US-China trade negotiations. Previously, the US's tough tariff policy triggered concerns about a long-term trade war, which became one of the main reasons for the obstruction of the last round of Bitcoin bull market.
According to Reuters, trade consultations between the United States and China in Switzerland ended with positive results on Sunday, with Chinese officials saying the two sides had reached "an important consensus."
The report also said that U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will announce details of "substantial progress" made in negotiations with China on Monday.
"This round of crypto market rebound is driven by optimistic expectations for U.S.-China trade negotiations," said Min Jung, an analyst at Presto Research. "We are seeing a classic rotation, with Bitcoin dominance reaching pre-2021 bull run levels and funds starting to flow into other crypto assets."
The analyst also pointed out that whether Bitcoin can break through its historical highs depends largely on the progress of subsequent trade negotiations, while other geopolitical tensions remain key variables.
In addition to macroeconomic conditions, continued inflows into spot Bitcoin ETFs and continued increases in Bitcoin holdings by large corporate finance departments such as Strategy are also considered "key factors" in maintaining the upward momentum.
“With macro events such as the upcoming U.S. CPI data on May 13 approaching, investors must remain vigilant, manage risks wisely, and adopt diversified strategies to cope with this high volatility market , ” said Kronos’ Liu.
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