HTX DeepThink highlights Bitcoin’s recent surge to $95,000 due to improved sentiment over tariffs from President Trump. Key economic data releases in early May could create a short liquidity window for crypto opportunities, despite ongoing trade uncertainties. The upcoming Fed policies and potential debt ceiling impacts loom over risk assets, while longer-term strategies should focus on institutional trends and the adaptation of FIT21 regulations.
HTX DeepThink is offering keen insights into the ever-changing landscape of crypto and global economics. The latest update reveals that Bitcoin has soared to an impressive $95,000 following President Trump’s more lenient commentary on tariffs, which has added a boost to the market spirit. Still, trade negotiations remain shrouded in uncertainty, making the upcoming weeks critical. As Chloe from HTX Research suggests, May might just provide a brief but significant liquidity window in the crypto sector.
Turning to President Trump’s second agenda for the 100 days, the focus has clearly been on fulfilling campaign promises, especially regarding cryptocurrencies. His administration has rolled out crypto-friendly regulations, for instance, refining stablecoin guidelines and cutting down on government spending. The next steps include wrapping up trade agreements and fostering peace between Russia and Ukraine while pushing a hefty “Big, Beautiful” plan featuring tax cuts and regulatory easing. The Senate is also set to debate the FIT21 bill, which aims to offer clearer guidance for digital asset regulation in the U.S.
Last week saw the crypto markets breaking away from U.S. equities, influenced by a weakening dollar and increasing interest from traditional finance firms. Bitcoin jumped to $88,000, partially fueled by encouraging remarks from both Trump and Treasury Secretary Bissenet. However, while optimism regarding trade appears to be mounting, actual agreements still seem distant, and pressure from the administration’s tariff conservatism keeps palpable uncertainty in play.
Looking ahead, the macro calendar is teeming with crucial data that could impact the market significantly. On April 30, figures for U.S. Q1 GDP and Core PCE will be on the table, followed a couple of days later by non-farm payrolls and the unemployment rate. Should these numbers reflect stagnating growth combined with easing inflation, they could bolster expectations for mid-year rate cuts, likely benefiting risk assets like Bitcoin and Ethereum. In contrast, better-than-expected results could lead to rising Treasury yields, potentially hitting cryptocurrencies hard.
The Federal Reserve currently finds itself in a complicated position. The reserves stand at around $3.3 trillion, with overnight reverse repos hovering at $94 billion. This nominal room for a rate cut comes with a caveat: the Fed reported significant losses on interest paid against reserves relative to what was earned on Treasury holdings. Given these figures, the Fed is inclined to maintain the current rates to ensure fiscal health and uphold independence.
May could present a brief opportunity for inflows into crypto, especially if early data points to economic slowing. However, the anticipated rising debt ceiling, likely to happen around mid-year, could drain liquidity from the markets, resulting in higher short-term rates and putting additional pressure on risk assets like Bitcoin. Historically, spikes in TGA typically trigger declines of 5-10% in crypto markets shortly afterwards, making it crucial for investors to prepare accordingly.
In summary, staying disciplined during this fluctuating market and thoughtfully following trends is essential. Short-term strategies should be based on upcoming data releases and this potentially profitable liquidity window in May. Meanwhile, long-term investors should keep an eye on the FIT21 implications and rising institutional interest in Bitcoin and others like Solana. The next significant wave might just emerge from these supportive conditions, presenting a unique chance for investors to capitalise.
Please note, this article is for informational purposes only and does not serve as investment advice.
