Bitcoin has surged over 3% in the last 24 hours, reaching over $97,000 on May 7, buoyed by positive sentiment surrounding potential US-China trade talks. The cryptocurrency's daily trading volume has also increased by 37% to $31.7 billion, indicating a significant uptick in market activity.

The optimism surrounding a potential trade deal between the US and China has been a key driver behind Bitcoin's recent price surge. US Treasury Secretary Scott Bessent's announcement of plans to meet with a team from China's Ministry of Commerce in Switzerland has raised hopes for improved trade relations between the two economic powerhouses. This positive development has not only lifted sentiment across global markets but has also had a positive impact on the cryptocurrency market.

Despite the bullish momentum, there is still skepticism in the market, with Polymarket bettors assigning only a 25% probability to a trade deal being reached by June. Additionally, all eyes are on the upcoming Federal Open Market Committee (FOMC) meeting on May 7, where the US Federal Reserve is expected to announce its decision on interest rate cuts. Traders are currently anticipating that the Fed will maintain interest rates at their current levels, with a 95.6% probability of no rate cuts, according to the CME FedWatch Tool.

Bitcoin's price surge on May 7 was accompanied by significant liquidations in the derivatives market, with over $83.6 million in short Bitcoin positions being liquidated in the last 24 hours. This surge in liquidations indicates strong upward momentum in the market. Bitcoin's open interest has also seen a steady increase over the past month, rising by 26% to $64.4 billion, reflecting growing trader participation in the market.

Technical analysis shows that Bitcoin is currently validating a falling wedge pattern, a classic bullish reversal pattern. The cryptocurrency has successfully reclaimed key support levels, including major moving averages and the yearly open at $93,000. Bitcoin's next major resistance level is at $98,000, with a breach of this level potentially pushing the price towards the technical target of the falling wedge at $100,200.

While the overall sentiment remains positive, there are cautious notes to consider, such as the emergence of bearish divergence from the Relative Strength Index (RSI), which could indicate a potential weakening of momentum. A daily close below $93,000 could lead to a retracement towards the $90,000-$87,000 range, where key moving

Source: https://cointelegraph.com/news/why-is-bitcoin-price-up-today?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound