Bitcoin BTC could soon hit record price highs, triggering accelerated gains in the wider altcoin market, as easing U.S.-China trade tensions may see markets react positively to a potential slowdown in the April CPI due this week.

The United States has reached a trade agreement with China after two days of high-level negotiations in Geneva, U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer announced on Sunday. Both countries are set to issue a joint statement on the Geneva trade talks later Monday.

The trade deal comes after weeks of a tit-for-tat trade war that saw both countries raise import tariffs above 100%, threatening to inject inflation into the global economy. As such, the positive March U.S. consumer price inflation data released last month was largely dismissed by investors and analysts as a lagging metric that didn’t accurately reflect the escalating trade tensions.

The bears, however, cannot make that argument anymore, thanks to the trade deal.

So, a continued softening of CPI could raise Fed rate cut bets, providing a bullish catalyst for a BTC rally to record highs above $110,000. On the other hand, a hotter-than-expected CPI could be dismissed as backwards-looking, reflecting the April tariffs and not accounting for the de-escalation in trade tensions.

The CPI due Tuesday is expected to show the cost of living eased to 2.3% year-on-year in April from March’s 2.4%, according to RBC. The core CPI, which excludes food and energy, is expected to have stayed at 2.8% year-over-year in April, with continued moderation in rent inflation.

According to 10x Research, consensus is that the headline CPI likely held unchanged at 2.4% in April.

«If this expectation holds, the market may view the inflation report as positive. Barring any negative tariffs headline, this week’s week’s inflation data could provide a bullish catalyst,» Markus Thielen, founder of 10x Research, told CoinDesk.

«CPI could be bullish, and may bring new all-time highs,» Thielen added.

Bitcoin, the leading cryptocurrency by market value, changed hands at around $104,000, just 5.1% short of hitting new highs above $109,350, CoinDesk data show.

BTC has had a near V-shaped recovery from $75,000 since early April, with prices surging 10% last week due to continued inflows into the spot exchange-traded funds (ETFs).

BlackRock’s spot bitcoin ETF (IBIT) has registered net inflows for 20 straight trading days, amassing over $5 billion in investor money, according to SoSoValue data. Last week, the Federal Reserve kept the benchmark borrowing cost unchanged in the range of 4.25% to 4.5%, while reiterating the data-dependent stance on potential rate cuts. Chairman Jerome Powell, however, offered dovish hints, saying «the underlying inflation picture is good,» while calling the inflationary impact of tariffs short-lived.

Ether, the second-largest cryptocurrency by market value, rose 39% to $2,500 last week, the best performance since December 2020, according to TradingView. Other major altcoins such as XRP, DOGE, ADA and SOL surged 9.7%, 56%, 19% and 20%, respectively.

According to HTX Research, there are no signs of speculative frenzy yet, meaning the rally could continue.

«Implied volatility (IV) in bitcoin options remains stable in the 50%–55% range, far below the extreme levels of 80%+ typically seen at the peak of past bull markets. CME Bitcoin futures open interest currently stands at $14.8 billion, well below the $20 billion peak observed during the 2020 Trump election period, indicating that leverage is still manageable,» HTX Research said.

«As long as yields do not climb back above 4.8% and ETF inflows remain steady, Bitcoin is likely to consolidate in the $105,000–$115,000 range while awaiting the next breakout trigger,» HTX added.

Decentralized finance (DeFi) on the Bitcoin blockchain may still be in its infancy relative to Ethereum, but Bitcoin DeFi (BTCFi) is becoming safer and cheaper, crypto analytics firm Messari said in a new report.

A central participant is Rootstock, one of the oldest Bitcoin layer-2 projects, crypto analytics firm Messari said in its «State of Rootstock» report, published on Thursday.

Rootstock is now secured by 81% of Bitcoin’s total hashrate, meaning miners that account for amount the hashrate are also approving transactions on the layer 2. The figure was just 56% before the the onboarding of Foundry and Spiderpool, the world’s largest and sixth-largest mining pools, respectively, in February.

Messari also observed that transaction fees on Rootstock are 95% cheaper than the average Bitcoin transaction and 55% cheaper than those on Ethereum.

Rootstock is one of numerous projects looking to bring greater utility to Bitcoin through expanding the provision for DeFi with smart contracts, enabled by «BitVMX», a modified version of the BitVM programming language. Other prominent Bitcoin layer-2 projects include Stacks and BOB («Build on Bitcoin»).

The project has also connected with bridging protocol LayerZero to enable Rootstock-native applications to connect with dozens of other blockchains, including Ethereum and Solana. Its momentum sets the stage for growing adoption of BTCFi through the remainder of 2025, according to Messari.

“As BTCFi continues to grow, Rootstock is well-positioned for broader adoption through core upgrades like a 60% reduction in transaction fees, alongside sustained investment in builder education and incentive programs,» Messari analyst Andrew Yang said.

Read More: Bitcoin’s Role in DeFi Is ‘Untapped Opportunity,’ Binance Research Says

They crypto bull move continued into the weekend thanks to a trio of positive macro developments.

Likely most responsible for the move was a President Trump Truth Social post regarding trade talks being held in Switzerland between the U.S. and China.

«A very good meeting today,» said Trump. «Many things discussed, much agreed to,» he continued. «A total reset negotiated in a friendly, but constructive, manner. We want to see, for the good of both China and the U.S., an opening up of China to American business. GREAT PROGRESS MADE!!!»

Earlier Saturday, Trump also announced a «full and immediate» ceasefire in the brewing war between India and Pakistan.

Completing the trio of good news, Russian President Putin said he was «in the mood for serious talks with Ukraine,» and suggested talks «without preconditions» in Turkey next week.

Bitcoin (BTC) rose to just a few dollars short of $105,000 before pulling back to the current $104,500, ahead 1.5% over the past 24 hours. Ether (ETH) has continued its recent outperformance, up 7.7% over the same time frame.