Bitcoin Skyrocketed Before Plummeting, Nearly Breaking Below the $100K Mark

Bitcoin price showed violent swings on Monday, May 12, as it soared to an intrasession high of $105,800 before plummeting and nearly breaching the $100,000 mark. The volatile moves triggered massive liquidations and may have clouded the near-term outlook.

As reported earlier, the U.S. and China agreed on Monday to reduce tariffs on each other’s goods, according to a joint statement. The news, which came after a meeting between U.S. Treasury Secretary Janet Yellen and Chinese Vice Premier He Lifeng at the World Economic Forum in May, sent bitcoin price surging to its highest level since February.

However, the rally was short-lived, and BTC soon began to decline as U.S. mkets closed, with the selloff accelerating. By 01:00 ET Tuesday, the price had dipped as low as $99,999 before recovering slightly.

The sharp price swings also forced a wave of liquidations in the broader crypto market. Data from Coinglass shows that over the past 24 hours, 212,000 traders were liquidated, for a total of $700 million—$480 million from long positions and $220 million from shorts.

The downturn can be attributed to two main factors. The first was profit-taking after the U.S.-China tariff news played out, leading to a selloff.

The second factor was remarks by Fed Governor Kugler, who said that tariffs still pose significant economic risks, ultimately keeping the pressure on the Fed to maintain interest rates at the current level. This, in turn, might stall any near-term catalysts for a bitcoin bull market.

With the U.S. and China having already made major progress on tariffs, there don't seem to be any more upward catalysts coming from trade policies. The next major market-moving event will likely be the Fed's rate decision, with most analysts expecting no rate cuts until July or later.

This means that crypto could face a corrective phase in May-June during this policy lull, as the market adjusts to the new interest-rate environment and takes a breather from the recent rally.