Bitcoin gains from macro relief, but analysts warn of renewed volatility

After reclaiming the $100,000 mark over the weekend, Bitcoin bulls pushed past the $103,000 level, turning it into support on Tuesday.

The total cryptocurrency market capitalization rose by around 2%, hitting $3.48 trillion.

However, it dropped 1.7% the next day to $3.28 trillion as investors booked profits ahead of the US CPI data release.

Bitcoin saw its price drop to an intraday low of $101,871 before recovering to trade near $103,376, marking a 0.5% increase over the past 24 hours. 

Ethereum also declined, reaching a low of $2,411 but recovered to $2,508 by late asian trading hours.

Will Bitcoin crash again?

With trade tensions easing, BTC reached an intraday high of $105,525 before shedding some of the value by late Asian trading hours.

The catalyst behind Bitcoin’s breakout appears to be de-escalating trade tensions between the US and China.

Over the weekend, US Treasury Secretary Scott Bessent and Chinese Vice President He Lifeng agreed to reduce tariffs in a deal signed in Geneva. 

Starting May 14, both nations will cut their respective tariffs to 10% for an initial 90-day period, down significantly from current levels of 145% and 125%.

The shift in tone has renewed risk appetite, helping lift risk-sensitive assets like Bitcoin, which had been under pressure during the prolonged trade war. Analysts say the improved liquidity backdrop and reduced geopolitical uncertainty are historically favourable for crypto rallies.

Adding to the momentum was the release of April’s CPI data, which showed annual inflation cooling to 2.3%. The lower-than-expected reading eased fears of prolonged tightening by the Federal Reserve and further boosted risk appetite.

Bitcoin found itself in the middle ground, benefiting from renewed risk appetite like equities, but lacking the retreat seen in traditional hedges.

In the meantime, on-chain analysts pointed to increasing liquidity concentration around the $102,000 to $103,000 zone. 

Well-followed commentator Daan Crypto Trades noted on X that BTC had “swept most nearby liquidity” after consolidating in the $103K–$105K range.

CoinGlass data supported this view, showing dense liquidation clusters just below current levels, around the $103,000 mark. 

Analysts are watching this range closely to gauge whether the recent breakout has more room to run or if a pullback is likely.

However, one thing analysts agreed on was the fact that volatility is expected as long as Bitcoin trades in this area. 

“It’s about to get seriously volatile for $BTC. Sharp wicks down, sharp wicks up,” wrote trader James Wynn, in an X post earlier in the day.

Wynn also referred to CoinGlass data, highlighting a buildup of sell orders near $106,000. Bulls need to clear this zone with strong momentum to confirm further upside, he said, adding that he expects BTC to rally toward $140,000–$160,000, with a potential top forming in July.

To maintain upward momentum, Bitcoin needs to reclaim and hold above $106,000, an area now acting as immediate resistance, a view echoed by analyst Haris Khan, who also identified this level as a key breakout threshold in the current cycle.