Bitcoin (BTC) is on the verge of reaching record highs, with current valuations sitting around $104,277.37. This surge is primarily fueled by easing trade tensions between the U.S. and China, which could lead to a broader bullish trend across the altcoin market.

In a recent announcement following two productive days of negotiations in Geneva, U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer revealed a historic trade agreement between the two nations. As part of this deal, the U.S. will temporarily cut tariffs on Chinese goods from 145% to 30% over the next 90 days, while China reciprocates with a tariff reduction from 125% to 10%.

This unexpected announcement has already sent Bitcoin prices soaring past $105,000, re-igniting market optimism after weeks of escalating trade conflicts that had previously raised import tariffs to stratospheric levels.

Analysts had previously dismissed March's U.S. consumer price inflation data as outdated, not reflecting the rapidly changing situation due to trade tensions. However, with this new trade agreement in place, the narrative is shifting.

Investors are now hopeful that a further easing of the Consumer Price Index (CPI) could boost prospects for Fed interest rate cuts, sparking a rally that could propel Bitcoin to unprecedented heights above $110,000. Still, a higher-than-expected CPI might be seen as irrelevant, as it doesn't account for the newly de-escalated tariffs.

Tuesday's CPI report is anticipated to show living costs easing to 2.3% year-on-year for April, down from March’s 2.4%. Core CPI, excluding food and energy, is expected to stabilize at 2.8%, suggesting a moderation in rent inflation.

According to expert insights from 10x Research, if these expectations hold true, the market may react positively to the inflation report. Markus Thielen, the firm's founder, stated that barring any negative tariff news, this inflation data could serve as a bullish catalyst.

Currently, Bitcoin's trading position is tantalizingly close to breaking previous all-time highs, hovering around $105,500—just 3.6% shy of surpassing the $109,350 mark. Following a robust recovery from $75,000 earlier this month, Bitcoin gained 10% last week, thanks in part to significant inflows into spot exchange-traded funds (ETFs), notably BlackRock's, which has accrued over $5 billion in investments.

In addition to Bitcoin’s rising fortunes, Ether (ETH), the second-largest cryptocurrency, surged 39% last week, reaching $2,500, marking its strongest performance since December 2020. Other notable cryptocurrencies, including XRP, DOGE, ADA, and SOL, also enjoyed substantial gains.

HTX Research emphasizes that there's currently no sign of speculative frenzy in the market, which could suggest that this rally has room to grow.

With implied volatility in Bitcoin options stabilizing around 50-55%—well beneath the explosive levels seen at the peaks of past bull markets—market analysts suggest that as long as yields remain manageable and ETF inflows continue, Bitcoin may stabilize between $105,000 and $115,000, awaiting its next breakout moment.