Bitcoin’s price exceeded $87,000 for the first time since April, driven by institutional interest and increased global liquidity. Despite the rally, analysts warn caution is needed regarding a potential bull market, highlighting ongoing U.S. tariff negotiations and the forthcoming Federal Open Market Committee meeting as critical factors. Other cryptocurrencies are also experiencing upward momentum, although Solana has seen a decline.
On Sunday, Bitcoin’s price surpassed $87,000, reaching approximately $87,325, which marks its highest valuation since April 2. This surge represented a notable 2.4% increase within a 24-hour timeframe. Analysts attribute this performance to a resurgence in institutional interest, particularly highlighted by Strategy’s recent acquisition of 3,459 BTC, rekindling investment despite previous losses totaling $5.91 billion on its holdings.
Dominick John from Kronos Research observed that this rally is driven by an increase in global liquidity facilitated by an expanded M2 money supply, which rose to $90.2 trillion in major economies from December to February. Additionally, a positive inflow of $15.8 million into U.S. spot Bitcoin exchange-traded funds last week signifies growing institutional confidence in cryptocurrencies.
Despite the current momentum, experts advise caution regarding the declaration of a new bull market. Peter Chung from Presto Research highlighted ongoing U.S. tariff negotiations as a source of market anxiety, asserting that resolving these issues is crucial for stabilising markets. He emphasised that clarity in political and financial matters is essential.
The forthcoming Federal Open Market Committee meeting scheduled for May 6-7 is generating anticipation, as the CME FedWatch Tool shows a 12.4% likelihood of a 25-basis-point rate cut. Sustained capital inflows will depend on the Federal Reserve’s maintenance of lower interest rates in the future.
Moreover, other cryptocurrencies have seen upward trends, with Ether increasing by 0.97% to $1,632 and XRP rising 1.38% to $2.11, while Solana experienced a slight decline of 0.87%, trading at $140.2.
