Bitcoin surpassed $93,000, driven by optimism over improved US-China trade relations, with key figures suggesting tariff reductions. Institutional interest resurged, with significant ETF inflows recorded. Altcoins like Ethereum and Dogecoin gained momentum alongside Bitcoin, although on-chain data signals some market fragility. The evolving regulatory climate may also contribute positively to market sentiment.
Bitcoin surged beyond $93,000 on Tuesday, marking the highest level since early March. This increase is largely attributed to optimism regarding improved US-China trade relations. Treasury Secretary Scott Bessent described the current 145% tariffs as “unsustainable”, while President Trump indicated they would “come down substantially”, alleviating fears of escalating trade conflicts between the two economic giants.
The rally saw Bitcoin rise nearly 7% in 24 hours, alongside significant gains across the broader crypto market. Bessent’s remarks at a private JPMorgan event suggested a likely near-term de-escalation, although he warned that a comprehensive trade agreement might take years to negotiate. Trump’s comments further supported this view, fuelling the bullish sentiment surrounding cryptocurrencies.
The resurgence in optimism has reinvigorated institutional interest. Bitcoin exchange-traded funds (ETFs) reported net inflows of over $381 million on Monday, a notable increase following a previous $107 million influx. This reflects the largest ETF inflow since January, indicating growing demand from institutional investors including MicroStrategy, which added 6,500 BTC to its holdings, showcasing continued conviction in Bitcoin’s value as an asset.
Altcoins also benefited from the bullish momentum. Ethereum (ETH) saw a rise of 8%, surpassing $1,700, while Dogecoin (DOGE) and Sui’s native token (SUI) increased by 8.6% and 11.7% respectively. The meme coin sector thrived, experiencing gains exceeding 15%, along with sectors such as AI and Real-world asset (RWA) tokens witnessing substantial improvements as well.
However, while the market showed positive signs, caution remains due to potential underlying fragility. On-chain data from CryptoQuant revealed a decrease in Bitcoin demand by 146,000 BTC over the past month, indicating that uncertainty still lingers. Market liquidity is also below historical benchmarks, highlighting potential resistance at crucial price levels between $91,000 and $92,000. These points may challenge the sustainability of recent gains.
Notably, investor behaviour is diverging; long-term holders are accumulating Bitcoin while short-term holders are selling. This trend points towards a renewed interest among seasoned investors amidst profit-taking by newer market participants. The broader financial market, exemplified by the 2.5% and 2.7% upticks in the S&P 500 and Nasdaq respectively, also mirrors this crypto rally, suggesting a unified response to the enhanced prospects for US-China relations.
Additionally, the changing regulatory landscape may foster better sentiment. With the SEC under new Chairman Paul Atkins dismissing multiple crypto enforcement cases, there is growing hope for a more favourable regulatory environment that supports innovation in the cryptocurrency space.
