Bitcoin (BTC) Surges Past $93,000 Amid Optimism
Bitcoin (BTC) experienced a significant rally on Tuesday afternoon, surpassing the $93,000 mark with an impressive rise of nearly 7%. This surge has been attributed to renewed investor enthusiasm and optimism regarding a potential easing of trade tensions between the U.S. and China. However, analytics firm CryptoQuant has issued a warning that certain challenges could hinder further price increases.
Investor Sentiment Boosted by Trade Remarks
The market’s positive momentum was fueled by comments made by U.S. Treasury Secretary Scott Bessent at a private JPMorgan event. He reportedly indicated that the ongoing tariff conflict with China was not sustainable and anticipated that de-escalation would occur “in the very near future,” referring to the current situation as a “trade embargo.” Nonetheless, Bessent cautioned that a comprehensive agreement between the two countries might take several years to finalize.
Trump Addresses Tariffs and Federal Reserve
Later in the day, President Trump spoke to reporters at the White House, stating that U.S. tariffs on China “will come down substantially” from the existing 145% level, easing fears of an escalating trade war. He also reaffirmed his support for Federal Reserve Chair Jerome Powell, dismissing recent speculation about a potential firing due to pressure for lower interest rates.
Crypto Market Reacts to Positive News
Following Trump’s remarks, Bitcoin reached a peak close to $93,400, marking its highest price since early March. Other cryptocurrencies also benefited from this upward trend, with Ethereum’s ether (ETH) rising 8% to exceed $1,700, while dogecoin (DOGE) and Sui’s native token (SUI) saw gains of 8.6% and 11.7%, respectively. The broader CoinDesk 20 Index, which tracks the performance of various cryptocurrencies, advanced by 5.2%.
Stock Market Recovers as Gold Declines
In tandem with the cryptocurrency market, stocks rebounded from a previous decline, with the S&P 500 and tech-heavy Nasdaq closing up 2.5% and 2.7%, respectively. Conversely, gold prices, which had reached a record of $3,500, saw a decrease of 1%.
Analysts at hedge fund QCP Capital noted that both Bitcoin and gold are benefiting from a shift in capital as investors move towards safe-haven assets amid rising inflation concerns. They pointed to increasing inflows into U.S.-listed Bitcoin ETFs and the resurgence of the Coinbase price premium, indicating heightened demand from institutional investors. Data from Farside Investors revealed that Bitcoin ETFs recorded over $381 million in net inflows on Monday, following a previous $107 million on Thursday.
Caution Ahead for Bitcoin’s Rally
Despite the recent price surge, not all indicators suggest a sustained upward trend. According to CryptoQuant, on-chain data reveals underlying weaknesses. Bitcoin’s demand has decreased by 146,000 BTC over the past month, although this marks an improvement from a significant decline in March. The demand momentum metric, which assesses new investor interest, has further deteriorated, reaching its most bearish level since October 2024.
Market liquidity also appears subdued, as indicated by the growth of USDT’s market capitalization, which has only increased by $2.9 billion over the last two months—below the 30-day average. Historically, Bitcoin rallies have coincided with USDT growth surpassing $5 billion, a benchmark that has yet to be achieved.
Adding to the caution, Bitcoin confronts a critical resistance zone between $91,000 and $92,000, aligning with the “Trader’s On-chain Realized Price” metric, which has historically acted as a resistance point during bearish conditions. CryptoQuant’s on-chain bull score has classified the current market environment as bearish, suggesting that a pause or potential pullback may occur if sentiment deteriorates.
