Bitcoin soars 4.16% after Trump-Sheinbaum deal

Suspension of tariffs and a record manufacturing PMI boost BTC to surpass $101,000, as investors bet on a sustained recovery.

The price of Bitcoin rebounded strongly, surpassing $101,839, after Donald Trump and Mexican President Claudia Sheinbaum announced an agreement that suspends tariffs for a month. This move, combined with a solid ISM Manufacturing PMI data (50.9), revitalized the crypto market, which had touched a key support at $91,700.

After an initial drop that led Bitcoin to test support at $91,700, the leading cryptocurrency rebounded strongly, registering an increase of 4.16% / TradingView

Bitcoin breaks key resistances

After an initial drop that led Bitcoin to test support at $91,700, the leading cryptocurrency rebounded strongly, registering an increase of 4.16% and reaching a high of $101,839, at the time of this report. This rally was accompanied by trading volume that doubled the 25-day average on Binance, signaling a strong inflow of buyers.

Bitcoin broke above two crucial technical levels: the 25-period moving average ($101,000) and the 50-period moving average ($98,900). These moves suggest that investors are regaining confidence in the digital asset, especially after trade tensions between the US, Mexico, and Canada temporarily eased.

Trump and Sheinbaum Agreement: A Breath of Breath for the Markets

The announcement of the one-month suspension of tariffs between the US and Mexico was the main catalyst for Bitcoin's recovery. This agreement not only reduces uncertainty in global markets, but also alleviates concerns about a potential trade war that could have negatively affected risk assets.

Moreover, Trump's promise to create a Bitcoin reserve for the United States has generated positive expectations in the crypto community, although the concrete details have not yet been revealed.

ISM Manufacturing PMI: A surprise

The Manufacturing Purchasing Managers' Index (PMI) came in at 50.9, beating expectations of 48.9 and marking its highest level since September 2022. This reflects the resilience of the US economy, which traditionally strengthens the dollar.

However, Bitcoin, which shows a correlation of 0.86 with the Russell 2000 (small-cap index), remained higher despite the dollar's strength. This suggests that investors are treating BTC as a risk asset, but with added appeal as a hedge against inflation.

Key Correlations: Bitcoin and Traditional Markets

According to data from NewHedge, Bitcoin maintains significant correlations with several traditional assets:

• Russell 2000 (IWM): 0.86
• S&P 500 (SPY): 0.74
• Gold (GLD): 0.67

These correlations indicate that Bitcoin is being influenced by stock market movements, especially in an environment of moderate risk aversion. Although the dollar could strengthen due to the solid PMI, Bitcoin's rally suggests that investors are diversifying their portfolios to include digital assets.

What's next for Bitcoin?

Analysts are closely watching the following key levels:
-Resistance: $106,300 (psychological and technical zone).
-Support: $98,900 (50-period moving average).

If Bitcoin manages to maintain its momentum and break through resistance at $106,300, it could aim for new highs in the near term. However, a further strengthening of the dollar or an increase in interest rates by the FED could exert downward pressure. For this week, traders have their eyes set on labor data, although with greater focus on the decisions of the White House.

Disclaimer: This content is merely informative and does not constitute financial advice. Cryptocurrencies are volatile assets; invest responsibly and do your own research.