In today’s report, we delve into the implications of these developments on the crypto market, analyze the latest Bitcoin price action, and highlight the technical, macroeconomic, and on-chain factors shaping the current landscape.

Here’s what we’ll cover today:

Let’s dive in!

Both traditional financial markets and the cryptocurrency sector delivered strong performances over the past week. While equity benchmarks encountered resistance and largely moved sideways, likely due to investor caution ahead of the anticipated U.S.-China peace talks this weekend, the broader market structure remains constructive. 

Notably, the S&P 500 regained its 200-day exponential moving average, a widely observed long-term trend indicator, and closed the week above it, signaling renewed strength in the medium-term outlook. 

In parallel, Bitcoin reclaimed the key psychological milestone of $100,000 and successfully closed its weekly candle above this level, reinforcing bullish momentum and investor confidence heading into the new week.

On Monday, May 12, 2025, the United States and China jointly announced a major de-escalation in their trade tensions following constructive negotiations in Geneva. As part of the agreement, the United States will reduce tariffs on Chinese goods from 145% to 30% for a 90-day period. In return, China will lower its tariffs on U.S. imports from 125% to 10% over the same timeframe.

The deal is intended to stabilize global trade flows and ease inflationary pressures by removing barriers that have significantly disrupted supply chains over the past two years. While the suspension is temporary, officials from both sides described the outcome as “substantial progress” and a foundation for further cooperation. A full joint statement with additional details is expected later today.

With Bitcoin pushing higher and reclaiming the $100,000 level, sentiment has improved notably. While Crypto Twitter may have seemed rather quiet to some over the past few days, the Crypto Fear and Greed Index now shows a sharp rise, currently reading 70, bringing us back into "greed" territory. 

Historically, such readings have often preceded market corrections, pullbacks, or at least periods of consolidation. However, it's important to emphasize that this metric alone is not a reliable predictor of short-term market moves. In previous bull markets, the index has remained in "greed" or even "extreme greed" for weeks without triggering a significant pullback in Bitcoin’s price.

Another key signal of strength is the Total Bitcoin Spot ETF Net Inflow, which has been positive for most of the past week, highlighting persistent institutional demand and contributing to the recent rally. 

We’re witnessing a continued shift in how Bitcoin is perceived: not just as a safe-haven asset in uncertain macro environments, as seen in recent weeks, but increasingly as a high-conviction, risk-on growth asset used both to outperform traditional markets and to hedge against long-term currency debasement.

This week brings several key economic data releases and events that could influence market sentiment. On Tuesday, markets will be watching the Consumer Price Index (CPI) data for April, including both the month-over-month and year-over-year figures, as well as Core CPI, which excludes food and energy. On Thursday, attention shifts to Retail Sales and Core Retail Sales for April, along with the Producer Price Index (PPI) and the Philadelphia Fed Manufacturing Index for May. Labor market data will also be in focus with the release of Initial and Continuing Jobless Claims. In addition, markets will listen closely to remarks from Fed Chair Jerome Powell and monitor inflation expectations from the University of Michigan's 1-year and 5-year surveys. To end the week, Friday will bring updated figures on Michigan Consumer Expectations and Consumer Sentiment.

Geopolitical tensions surrounding the war in Ukraine have taken a new turn as signals emerge suggesting potential openness to direct negotiations. While Russian leadership has indicated willingness to engage in talks, skepticism remains among Western voices regarding the likelihood of any near-term resolution. Uncertainty persists around whether either side is ready to compromise on key issues, and political rhetoric continues to reflect a complex and fragile diplomatic landscape.

From a financial perspective, the potential for de-escalation could reduce geopolitical risk premiums across global markets. If tensions ease and energy markets stabilize, central banks, especially in Europe, may feel less pressure to remain restrictive. This could open the door to more accommodative monetary policies, improved credit conditions, and stimulus in regions previously constrained by geopolitical uncertainty, all of which can contribute to an expansion in money supply (M2).

The chart shows a striking short-term correlation between global M2 money supply (in orange) and the price of Bitcoin (in white), with M2 appearing to lead Bitcoin by approximately 10 weeks. While some analysts argue that Bitcoin and monetary aggregates like M2 have become decoupled over the long term, this chart clearly demonstrates that, at least in the short run, liquidity expansion remains a key driver of Bitcoin price movements.

Since late 2023, increases in global M2 have preceded notable Bitcoin rallies with remarkable consistency, supporting the view that Bitcoin behaves as a high-beta liquidity proxy. This pattern reinforces the idea that shifts in global monetary conditions, especially expansions in broad money supply, 3can have a delayed but powerful influence on crypto markets.

Now let’s dive into the part you’re really here for: the charts, key levels, trade scenarios and what’s next for crypto. 🔥 

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