Bitcoin Regains Its Uptrend Despite Trade Risks
Written by Linh Tran, Market Analyst at XS.com
Bitcoin (BTC) has just completed three consecutive weeks of gains, staging a strong recovery from the bottom established in early April. Currently, BTC is maintaining stable trading above the $90,000 mark, despite mixed signals stemming from U.S.–China trade tensions and volatility in global economic data.
Trade tensions between the U.S. and China had previously been one of the major factors putting pressure on Bitcoin and other risk assets earlier in April. The successive rounds of retaliatory tariffs between the world’s two largest economies triggered a risk-off sentiment, pushing BTC into a deep correction phase.
However, in recent weeks, expectations for a possible resumption of negotiations between the U.S. and China have begun to take shape. Statements from President Donald Trump suggested that the U.S. is engaging in dialogue, raising hopes of easing tariff tensions. This shift has served as a positive psychological catalyst, helping both Bitcoin and global stock markets recover simultaneously.
Nonetheless, market sentiment remains cautious due to inconsistencies in official statements. While Trump has expressed a willingness to resume dialogue, the Chinese side has denied that any talks are currently underway, casting doubt over the substance of the negotiations. This uncertain backdrop has caused Bitcoin to stall its recovery, consolidating within a narrow range around $92,000–$93,000 instead of extending its breakout.
Mixed economic data released last week — including PMI figures and labor market reports — indicate that the U.S. economic recovery is showing signs of slowing. However, the current signs of weakness are not yet strong enough to alter expectations for Federal Reserve monetary policy. The base-case scenario still leans toward the Fed initiating a rate cut cycle starting in September.
In this context, expected lower capital costs and looser liquidity conditions in the second half of the year are gradually emerging as supportive factors for Bitcoin and other risk assets.
One of the most notable positive signals is the return of institutional capital. U.S.-listed spot Bitcoin ETFs have recorded six consecutive sessions of net inflows, with substantial size. This is a clear indication of a cautious yet steady return of long-term investors following the capital outflows seen in Q1.
The synchronized movement between the two-week rally in U.S. equities and the resumption of net inflows into Bitcoin ETFs shows that investor sentiment is slowly shifting back toward a “risk-on” mode, although still with a cautious undertone.
Although Bitcoin’s upward momentum is showing some signs of deceleration, the aforementioned positive factors — including supportive policy expectations, relative global financial market stability, and renewed institutional flows — could continue to bolster BTC’s medium-term uptrend.
In the short term, a minor corrective pullback is entirely possible as BTC consolidates while awaiting new catalysts, such as real progress in trade negotiations or key U.S. economic data releases later this week.
