Can Bitcoin rise to fresh record highs?

• BTC rises to 110.5k before easing lower.
• US-China trade talks lift the market mood.
• US CPI inflation is expected to rise to 2.5% YoY. 
• BTC ETFs see renewed demand.
• Bitcoin exchange reserves fall. 
• Bitcoin technical analysis – levels to watch. 

Bitcoin has recovered from the 100k low reached last week, climbing to a peak of 110 points 5K in early trade on Tuesday as investors continue to make progress in US-China trade talks. However, there is some caution ahead of tomorrow’s US CPI inflation data. 

US-China trade talks fuel an improved market mood 

BTC trades over 4% higher since last Thursday’s low, boosted by optimism surrounding US-China trade talks, which are continuing for a second day today in London. Officials, including Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, met with Chinese Vice Premier He Lifeng to discuss export controls, tariffs, and trade concerns. Signs of improving relations and a constructive outcome from the talks could be geopolitical worries, and based on appetite for risk, your assets, including cryptocurrencies. 

US CPI could inject volatility

There is still some caution ahead of tomorrow's CPI report, which is expected to show that US inflation rose to 2.5% annually in May, up from 2.3%. Core inflation is expected to rise to 2.9%, up from 2.8%. Signs that inflation is heating up again could unnerve the market, especially given that Trump’s trade tariffs are expected to increase inflation further. Hot inflation could cause the market to push back on Fed rate cut expectations, which may weigh on BTC price in the near term. Bitcoin tends to perform better in low-interest-rate environments. 

BTC ETFs see renewed demand 

Meanwhile, BTC ETFs saw a rebound in demand at the start of this week, booking net inflows of $386.2 million on Monday, following two straight weeks of net inflows. Furthermore, BlackRock’s ETF made history on Monday, becoming the fastest ETF in history to reach $70 billion AUM in just 341 trading days, significantly outpacing the GLD (Gold ETF), which previously held the record at 1691 trading days.  

This rapid growth highlights the massive interest in Bitcoin through regulated products, as traditional investors and institutions rushed to gain exposure to the relatively new asset class. Should BTC ETF demand remain persistent, it could help BTC rise to fresh record highs. 

Exchange reserves fall 

Declining exchange reserves are an ongoing support for BTC price. According to crypto quant data, since July 2024, over half a million BTC have left centralised exchanges. Bitcoin reserves on centralised exchanges were at 1.55 million in July 2024 and have fallen to just 1.01 million BTC today, marking a reduction of 550,000 coins in under a year. This behaviour and steady withdrawal point to long-term holding. As more Bitcoin leaves exchanges, available supplies shrink, and if demand rises simultaneously, this puts upward pressure on the price. 

Furthermore, according to sentiment data, renewed accumulation is being seen across wallet sizes, particularly those holding between 10 and 100 BTC. 

Bitcoin technical analysis 

After falling to 100k support, the psychological level and the 50 SMA, BTC/USD rebounded, rising above the 20 SMA and the 110k level to a peak of 110.5k. The price has eased back to 109.2k at the time of writing. 

Should the bullish momentum continue, buyers will look to rise past 112k to fresh record highs. With blue skies above, 120k is the next logical target. 

Immediate support can be seen at the 20 SMA at 106.5k and below here at 100k. A break below 100k exposes the 200 SMA at 95k. 

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