This week, markets reacted strongly to the US-China trade ceasefire, which eased tariff concerns and boosted investor confidence. Alongside softer inflation data, equities surged while bitcoin and Ethereum gained fresh momentum. However, uncertainties remain as traders eye key economic releases and ongoing geopolitical tensions.
Macro: Trade Truce Lifts Markets; Risks Remain
On Monday, 11 May, the US and China agreed to a 90-day trade ceasefire, pausing tariff escalations and easing a major source of market uncertainty. The S&P 500 surged 4%, erasing year-to-date losses, while the Nasdaq climbed nearly 30% from recent lows. The VIX fell almost 25% this week—a historically notable drop—signalling a surge in investor confidence. Still, analysts caution optimism may be premature amid lingering risks. Market focus now turns to economic data and central bank guidance.
April retail sales rose just 0.1%, a sharp slowdown from March’s 1.7%, suggesting consumers pulled forward purchases ahead of tariffs. Inflation showed further cooling: CPI rose 2.3% year-over-year—the lowest since 2021—and PPI dropped 0.5% month-over-month. This easing fuels speculation about potential Fed rate cuts later in 2025, although the Fed is expected to keep rates steady for now while closely monitoring incoming data.
Crypto: BTC Eyes All-Time High, ETH Breakout Threatens
Recently, Coinbase disclosed a data breach affecting about 97,000 users. CEO Brian Armstrong quickly rejected a USD 20 million ransom demand and offered a reward for information on the attackers. Coinbase is actively supporting affected customers, and while shares fell over 7%, the company’s transparent response aims to maintain user confidence.
On the technical side, BTC broke above USD 100,000 last week for the first time since February, driven by technical momentum, institutional flows, and renewed investor interest. Softer inflation data this week reinforced hopes for Fed cuts, pushing BTC to a high of USD 105,700 before consolidating just below that level. Traders are now closely watching USD 108,000, the previous all-time high, as a critical resistance that must be overcome for the next leg up. Meanwhile, USD 100,000 remains a strong psychological and technical support, providing a key floor in this renewed bullish trend.
Week over week, Ethereum surged 40%, boosted by the Pectra upgrade increasing network activity and burn rates. ETH dominance rose toward 9%, while BTC dominance fell to 63%, and the ETH/BTC ratio is now testing a breakout, hinting at growing altcoin strength.
In my view, if BTC manages to break decisively above the USD 108,000 resistance, we could see further weakening of BTC dominance, opening the door to a sustained altcoin season as investors rotate into other crypto assets. However, if this resistance holds firm, BTC dominance may rebound, drawing capital back to bitcoin and limiting altcoin gains in the near term.
Looking Ahead: Tariff Talks, Economic Data, Crypto Technicals in Focus
Next week, markets will monitor three key themes: ongoing US-China tariff negotiations, fresh US economic data (retail sales and housing), and crypto technical setups. Bitcoin’s push near its all-time high (~USD 108,000) and Ethereum’s momentum will be critical indicators, especially if macro conditions continue to support risk assets.
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