Crypto investor sentiment has improved after Trump signalled potential tariff reductions, but analysts warn of continued risks during weekends due to low liquidity. Bitcoin’s notable recovery of nearly 11% may be short-lived unless it can overcome previous resistance levels. Experts predict a 70% chance for market recovery by June, depending on trade negotiations with China.
Recent developments in the cryptocurrency market indicate a rebound in investor sentiment following remarks from US President Donald Trump, who hinted that import tariffs on China might significantly decrease. Despite this optimism, analysts caution that structural vulnerabilities, particularly during the weekends, could still lead to unpredictable price movements due to low liquidity.
Emerging from a week where Bitcoin (BTC) demonstrated a remarkable recovery of nearly 11%, experts from the Bitfinex exchange highlighted that while sentiment has improved, it does not guarantee stability. They emphasised that historically, weekends present risks for sharp price fluctuations, especially when the market experiences low trading volume, alongside high open interest. The recovery seen last week, while encouraging, comes with the lingering threat of volatility due to external macroeconomic factors.
On Sunday, April 6, Bitcoin saw a dip below $75,000 after initially decoupling from the considerable declines in the US stock market influenced by Federal Reserve Chair Jerome Powell’s statements regarding tariffs. This downturn was accentuated by the limited liquidity available over the weekend, pushing Bitcoin to the forefront as the main asset for trading adjustments. This scenario created a somewhat fragile market landscape.
Marcin Kazmierczak, head of RedStone blockchain oracle firm, echoed the caution, noting that improved sentiment does lend some stability but does not completely shield the market from swift price changes during sluggish trading periods. Investors are urged to stay vigilant as liquidity issues can exacerbate price shimmers despite the current more optimistic atmosphere.
Aurelie Barthere, a principal research analyst at Nansen, asserts that the cryptocurrency market may have already absorbed the extent of tariff-related fears. She expressed that investors are awaiting a signal of stability before fully committing, hinting at the need to break through previous resistance levels for the rally to sustain. Markets currently perceive a safety net under equities and the dollar due to potential governmental interventions.
With Nansen previously predicting a 70% chance for market recovery by June, the timing seems contingent on tariff negotiation outcomes. These discussions may be just strategic posturing as Trump’s administration eyes an extensive trade agreement with China, which could heavily impact market behaviour in the upcoming weeks.
