What’s on the Horizon for Bitcoin with the Crypto Market Reacting Positively to Trump’s Trade Deal?

Bitcoin (BTC) is approaching the $100,000 mark, buoyed by President Donald Trump’s hints of a significant trade deal, with speculation that it may involve the U.K. The price surge aligns with the broader bullish trend in cryptocurrency and traditional markets, as Asian stocks and S&P 500 futures are both showing gains.

However, several factors suggest that Bitcoin’s journey toward $100,000 might not be without challenges.

Potentially Underwhelming Trade Deal Announcement

While Trump’s statements have fueled optimism, reports from the Wall Street Journal suggest that the trade deal could be nothing more than a framework for future negotiations, rather than a finalized agreement. If the deal fails to materialize into concrete results in the short term, the market may lose its initial excitement, causing Bitcoin’s bullish momentum to cool off.

Key Resistance at $99,900

Bitcoin is now testing the crucial $99,900 resistance level, which could pose significant selling pressure. Early buyers who purchased around this price point earlier this year may look to take profits, creating a roadblock for the price to break through. The resistance at this level could cause Bitcoin to consolidate before potentially making another attempt at breaking through $100,000.

Weakening Coinbase Premium

The Coinbase premium, which tracks the price discrepancy between Bitcoin on Coinbase and Binance, is a commonly used metric to gauge U.S. investor demand. Historically, a strong premium has accompanied Bitcoin bull runs. However, since late April, the Coinbase premium has been diverging negatively from Bitcoin’s price, signaling reduced demand from U.S. investors. This divergence suggests that the rally may lack sufficient support from this key market.

RSI Bearish Divergence Indicates Slower Momentum

Although Bitcoin hit a new multi-week high in recent sessions, the 14-hour relative strength index (RSI) failed to confirm the new highs. This bearish divergence indicates that momentum may be weakening, signaling that Bitcoin could face difficulty in maintaining its current rally. A slowdown in momentum could potentially lead to a correction before further upward movement.

In summary, while Bitcoin nears the critical $100,000 level, factors like uncertainty over the trade deal, resistance at $99,900, weakening demand from U.S. investors, and bearish divergence on the RSI suggest that the road ahead may not be as smooth as it appears. Traders should be cautious of potential pullbacks as Bitcoin faces significant hurdles before breaking through the $100,000 barrier.