Enhanced Global Trade Conditions Boost Cryptos, Sending Ether Prices Soaring

Discussions about the US-China trade deal and the US-UK agreement have turned sentiment from US President Donald Trump's muddled trade agenda to enhanced global trade conditions, boosting cryptos over the last week.

Despite a strong start to the year for crypto, it has been a volatile few months for digital assets.

Following a volatile few months for digital assets, arising from a turbulent macroeconomic backdrop, crypto is now displaying signs of recovery.

After U.S. President Donald Trump's muddled trade agenda set the tone for a bleak outlook on global trade, the latest developments have pivoted to highlight the improvements in external economic conditions.

This shift in narrative has had a positive impact on risk-appetite and, subsequently, boosted cryptos.

Ether, the second-largest cryptocurrency, saw its biggest weekly gain in 2021 as trade deal hopes and a network upgrade boosted the token.

The second-largest cryptocurrency surged 14% on Friday to reach $2,490, marking a nearly 33% weekly gain. The last time the token saw anything close to this magnitude was in 2021, during the pandemic's crypto bubble.

Speculative excesses and low interest rates fueled the surge back then.

Bitcoin wasn't far behind as the OG token rose 0.8% to $104,336, which was driven by better-than-expected confidence in the digital asset market after the U.S. and U.K. announced a new trade agreement.

After a period of rising tariffs from President Trump’s administration rattled risk markets, the U.S. has moved to forge trade deals with the U.K., and now China, suggesting a broader improvement in international economic relations.

The renewed interest in Ether can be linked to investors' growing attention on Ethereum's ongoing technological advancements.

The recent activation of the Pectra upgrade on the network is widely viewed as a crucial step in improving cryptocurrency's commercial infrastructure.

These changes are essential for maintaining competitiveness against rapidly developing alternatives like Solana.

They aim to enhance network efficiency, enable more sophisticated wallet functionalities, and decrease transaction costs.

However, even with the latest rally, Ether is still around 50% below its peak in November 2021, highlighting its lagging performance compared to Bitcoin and other leading digital assets.

As Bitcoin approached the $100,000 milestone on Thursday, investors liquidated cryptocurrency futures and perpetual contracts at an extraordinary pace.

Data from Coinglass reveals that the short position liquidation reached $836 million on Wednesday, the highest level observed since at least November 10.

On the last day, unwinding negative positions against Ether generated $290 million.

As short sellers usually move quickly to buy back and close out their positions, these liquidations can significantly drive up prices.

Deribit, the main cryptocurrency options exchange, shows that the majority of Bitcoin option trades are hedges.

The second-highest open interest is in puts expiring on May 30 with a strike price of $65,000, while the highest is associated with calls at $100,000 on the same expiration date.

There is a clear sense of optimism across different contract maturities.

With Polymarket bets on Bitcoin’s chances of $105,000 already being deployed, the crypto betting site is likely to show further upside soon (this level was breached earlier today, although it has since retreated slightly).

Matthew Hougan, chief investment officer at Bitwise Asset Management, predicted in a recent blog post and interview that Bitcoin will reach above $200,000 this year, among many other cryptocurrencies set to hit new all-time highs.

Arthur Hayes, chief information officer at Maelstrom, and Geoff Kendrick, a senior expert at Standard Chartered, are among those forecasting that Bitcoin will reach $200,000 by year-end.

The latest increase in sentiment highlights a significant shift after Bitcoin experienced a substantial decline to $74,500 just a few weeks ago.

Technical indicators are now flashing a buy signal.

While oscillators indicate a sell signal, moving averages overwhelmingly suggest a strong buy.

Among the oscillator indicators, the Relative Strength Index (14), Commodity Channel Index (20), Momentum (10), Stochastic RSI Fast (3, 3, 14, 14), and Williams Percent Range (14) signaled a sell.

However, the MACD Level (12, 26) and Ultimate Oscillator (7, 14, 28) pointed toward a buy. The remaining indicators showed a neutral reading.

Within the moving average indicators, nearly all signaled a buy.

The Hull Moving Average (9) indicated a sell signal, while the Ichimoku Base Line (9, 26, 52, 26) suggested a neutral reading.