Bitcoin Rebounds Above $112K Amid Renewed Optimism on Trade Talks

Bitcoin began to recover this week, climbing back above the $112,000 level as optimism grew around potential progress in upcoming U.S.–China trade discussions. Markets are hoping that next week’s meeting between President Trump and President Xi could deliver either a new deal or an extension of existing agreements — a scenario that would likely support risk assets, including crypto.

At the same time, short-term momentum models that had been signalling downside pressure for several weeks are now beginning to ease, an encouraging sign that selling exhaustion may be setting in. Historically, when these gauges begin to decline after extended periods of strength, it often coincides with renewed inflows and improving sentiment in Bitcoin.

However, a note of caution remains: major bullish moves typically occur only after momentum indicators fully exit oversold conditions, and that threshold has not yet been reached.

Positioning data also paints a mixed picture. Professional traders — often viewed as “smart money” — appear skeptical of the current rebound, maintaining a neutral to cautious stance. In contrast, retail traders are now net short, which from a contrarian perspective could help fuel the upside in the near term.

Meanwhile, shorter-term timing models suggest Bitcoin may still have a few days of room to rally before facing potential resistance. A stronger push toward $120,000 would likely confirm renewed market conviction, while a failure to build momentum could risk another test of the October lows.

Bottom line: Bitcoin’s recovery above $112,000 shows early promise, supported by improving sentiment and fading bearish momentum. But with professional traders unconvinced and oversold signals still lingering, the market must prove its strength in the days ahead to avoid another pullback.