Written by Antonio Di Giacomo, Senior Market Analyst at XS.com
The price of Bitcoin experienced a significant recovery after Mexico’s president, Claudia Sheinbaum, reached an agreement with U.S. President Donald Trump. The cryptocurrency surged to the $100,000 zone before being corrected this Tuesday. This bullish movement was driven by the news that Mexico would deploy 10,000 soldiers to the U.S. border in exchange for a pause on import tariffs.
Before this announcement, the outlook for the cryptocurrency market was entirely different. Over the past weekend, Bitcoin fell below $92,000 due to fears stemming from a 25% tariff increase on Mexico and Canada and an additional 10% on China. The uncertainty surrounding these measures triggered a wave of massive sell-offs, leading to record liquidations exceeding $2 billion in a single day across cryptocurrencies.
The price crash affected Bitcoin and other cryptocurrencies, causing a widespread market decline. Ethereum, the second-largest cryptocurrency, lost nearly 20% within hours, while smaller altcoins suffered even sharper losses. Selling pressure intensified as institutional investors reduced their exposure amid regulatory and economic uncertainty.
With the agreement reached between Sheinbaum and Trump, the market outlook took a positive turn. The easing trade tensions between the two countries boosted investor confidence, driving higher confidence in Bitcoin and other cryptocurrencies. This event highlights how geopolitical and economic factors can significantly influence digital asset prices.
Despite the price rebound, analysts warn that cryptocurrency market volatility remains high. Bitcoin continues to face challenges such as Federal Reserve monetary policies, government regulations, and the behavior of large investors. Experts suggest that the $100,000 level could become a strong resistance in the short term, making sustained growth difficult without new catalysts.
On the other hand, some optimistic analysts believe this event marks the beginning of a new bullish cycle for Bitcoin. They argue that reduced trade tensions and increasing institutional adoption could push the cryptocurrency to new all-time highs in the coming months. However, uncertainty persists, and investors must be prepared for potential price fluctuations.
In conclusion, the recent agreement between Mexico and the United States has significantly impacted the cryptocurrency market, allowing Bitcoin to recover strongly after its weekend drop. However, volatility remains a constant factor in this sector, meaning investors must stay alert to economic and political developments that could affect digital asset prices.