Bitcoin has started trading around its 50-week simple moving average (SMA), a level which has acted as a strong support in its three-year upward trend. Since 2023, Bitcoin has shown upward momentum three times from this point. The largest cryptocurrency entered a period of potential global risk appetite increase following China’s decision to suspend the 24% additional tariffs on U.S. goods.
China’s Trade Move May Ease Markets
The Beijing administration announced its decision to suspend additional tariffs on U.S. goods for a year, aiming to reduce ongoing trade tensions. The Ministry of Finance stated that retaliatory tariffs on agricultural products like soybeans, corn, wheat, sorghum, and chicken would be suspended starting Monday. However, a core 10% customs tariff will remain in effect.
This decision followed a meeting between U.S. President Donald Trump and Chinese President Xi Jinping last week. The Washington administration had subsequently retracted half of the fentanyl-related sanctions it imposed on Chinese goods. This easing of tensions between the two sides could pave the way for reduced uncertainty in global markets and spark renewed investor interest in risky assets.
Bitcoin Tests Critical Levels
Bitcoin is approaching the 50-week SMA line at approximately $102,900, seeking a new equilibrium. Previously, this technical threshold was a region where buying momentum had reignited three times. Investors are keen to see if a similar recovery will occur for the fourth time.
However, there are elements casting a shadow on the optimistic outlook. Notably, the technology company Sequans Communications has led to a weakening of the corporate treasury narrative by selling its BTC holdings to pay off debts. Such sales, contrary to the trend of companies accumulating Bitcoin, could negatively impact market sentiment. Nonetheless, the relaxation of trade tensions and a rise in risk appetite may create an opportunity for Bitcoin to regain strength.