Analysts Say Improved Trade Sentiment Removes Key Market Risks, Eyes Turn to Potential Tax Relief
A new 90-day tariff truce between the United States and China is generating optimism across financial markets, with analysts predicting a rally in Bitcoin, altcoins, and equities as global trade tensions ease.
On May 12, the White House announced that both countries agreed to lower tariffs to 10% — a 24% reduction from current rates — for a trial period beginning May 14, signaling renewed commitment to trade normalization.
At a press conference in Geneva, U.S. Treasury Secretary Scott Bessent emphasized that both governments are aligned in rejecting economic decoupling:
“What has occurred with these very high tariffs was the equivalent of an embargo,” Bessent said.
“Neither side wants that. We want trade — more balanced trade.”
Analysts: Risk of Sudden Trade Escalation Has Receded
The constructive tone of negotiations removes one of the biggest sources of market volatility in recent months. According to Aurelie Barthere, principal research analyst at Nansen, this opens the door for a broader rally in risk assets, particularly altcoins and U.S. equities.
“Bitcoin is already near its all-time highs,” Barthere told Cointelegraph.
“But with easing trade tensions, it’s likely that altcoins, stocks, and even the U.S. Dollar Index (DXY) will play catch-up.”
Barthere added that Bitcoin has recently outperformed risk assets due to its insulation from tariff-related policy risks. Now, as macro uncertainty fades, other assets may begin to close the performance gap.
Tax Relief Package Could Supercharge Markets
Bitcoin is currently trading 4.8% below its all-time high of $109,800 (set in January 2025), according to Cointelegraph Markets Pro data. However, analysts believe a tax relief package — if announced — could be the catalyst to push risk assets beyond their previous highs.
“If a generous tax cut package materializes by July, including personal and corporate tax cuts, that could be a major tailwind,” Barthere said.
While the Trump administration has yet to unveil concrete proposals, Bessent hinted that such a package could be released by mid-summer.
Technical Indicators Align With Macro Tailwinds
Improved trade sentiment has coincided with the emergence of bullish chart patterns across Bitcoin and altcoin markets. Analysts are closely watching a developing bull flag pattern on the Bitcoin weekly chart, which could suggest a rally to $150,000 if confirmed.
Meanwhile, broader market optimism has been reinforced by easing geopolitical tensions and rising institutional demand for cryptocurrencies via spot Bitcoin ETFs, which have seen sustained inflows over the past five trading days.
Final Thoughts: A Summer Breakout in the Making?
With the risk of a sudden U.S.–China trade escalation off the table for now, and a possible tax stimulus package on the horizon, analysts say the current macro landscape is increasingly favorable for risk assets.
If economic cooperation continues and fiscal incentives materialize, the second half of 2025 could set the stage for new all-time highs in both crypto and equity markets — with Bitcoin potentially leading the charge.
