Bitcoin Price Rises Above $97K on US-China Trade Optimism and Short Liquidations

Bitcoin Soars to $97K Amid US-China Trade Optimism and Market Momentum

Bitcoin surged over 3% on May 7, briefly touching $97,700 during early Asian trading hours, as investor sentiment turned positive on renewed hopes of progress in US-China trade negotiations. The flagship cryptocurrency is now trading around $97,012, with daily trading volume up 37% to $31.7 billion.

BTC/USD daily chart. Source: TradingView

The price spike follows remarks from US Treasury Secretary Scott Bessent, who announced plans to meet with China’s Ministry of Commerce in Switzerland. Bessent emphasized that current tariffs are “unsustainable,” signaling a possible thaw in trade tensions. China’s openness to talks has bolstered risk-on sentiment across global markets, including cryptocurrencies.

Source: Treasury Secretary Scott Bessent

Despite the optimism, skepticism lingers. Prediction platform Polymarket still shows only a 25% probability of a trade deal being reached by June. Meanwhile, the market awaits the U.S. Federal Reserve’s May 7 FOMC meeting, with expectations firmly leaning toward no rate cut—95.6% odds of rates staying unchanged, according to the CME FedWatch Tool. Still, Bitcoin appears to be rallying regardless of policy expectations, although any hawkish signals from Fed Chair Jerome Powell could introduce volatility.

Target probabilities for May 7 Fed meeting. Source: CME FedWatch

Short Liquidations Fuel the Rally

Adding fuel to Bitcoin’s rally was a wave of short liquidations totaling over $83.6 million in the past 24 hours—compared to just $15 million in long liquidations. This forced buying pressure is reminiscent of late March, when $122 million in short liquidations helped push Bitcoin up 6%.

Total Bitcoin liquidations. Source: CoinGlass

Open interest (OI) in Bitcoin has climbed 26% over the last month, reaching $64.4 billion, up 4% in just the last 24 hours. A rising OI typically signals increased market participation and confidence in the trend. Funding rates also flipped back into positive territory at 0.0046%, reinforcing the bullish momentum.

BTC OI-weighted funding rate. Source: CoinGlass

Technical Outlook: Bitcoin Targets $100K

Bitcoin’s rally is also technically supported by a breakout from a falling wedge pattern—typically a bullish reversal indicator. The cryptocurrency has reclaimed key support zones, including the yearly open at $93,000 and all major moving averages.

BTC/USD daily chart. Source: TradingView

The immediate resistance lies at $98,000. A clear breakout above this level would validate the wedge breakout and could propel BTC toward the pattern’s projected target of $100,200.

However, traders should remain cautious. A bearish divergence in the Relative Strength Index (RSI) suggests potential momentum weakness. A daily close below $93,000 could invalidate the bullish setup and push prices back to the $90,000–$87,000 range, aligning with key support from the 200-day, 50-day, and 10-day SMAs.