Bitcoin struggles to surpass the $100,000 mark amid fluctuating economic indicators and pressure from President Trump’s comments on Federal Reserve policy. Following strong US job growth, traders are reassessing the prospects for interest rate cuts, which has led to mixed signals in the market. Despite some volatility, Bitcoin and other cryptocurrencies have started to gather renewed interest from investors driven by fears regarding US fiscal policies and upcoming economic developments.
Bitcoin has recently faced challenges in breaching the $100,000 mark, with various economic factors contributing to its struggle. Following strong job growth figures, US President Donald Trump increased pressure on Federal Reserve Chair Jerome Powell, asserting that the Fed should consider cutting interest rates. This comes as bond traders dismissed Trump’s assertions, instead recalibrating their expectations based on robust economic indicators, including last week’s manufacturing report.
The uncertainty surrounding Trump’s trade policies has injected considerable turbulence into the markets, fuelling fears of a potential US recession. In response, traders have shifted focus towards short-term Treasuries, anticipating that the Fed may adjust its stance in the coming month to support the economy. Notably, futures traders are now acknowledging the Fed’s cautious messages, leading to a significant increase in two-year rates.
The market has experienced notable volatility since the escalation of the US trade war. This increased unpredictability has left analysts struggling to forecast outcomes, drawing comparisons to crisis-era fluctuations observed during the pandemic and the 2008 financial collapse. Despite a resilient jobs report, traders appear to be overlooking the contraction witnessed in US GDP and other recessionary indicators.
Furthermore, the dollar has felt renewed pressure, exacerbated by shifting market sentiments towards Trump, showing that this sentiment is influencing cryptocurrency markets too. Last week, Bitcoin attempted to claw its way back toward hitting the $100,000 threshold but retreated to around $94,100. After a slight uptick, it now sits at approximately $96,891, having experienced a slight fall from last week’s high of $97,480.
Bitcoin’s trading behaviour has shifted dramatically, as it begins to resemble a more traditional risk asset. In April, the cryptocurrency even surpassed many typical safe havens, including gold. Supporters of Bitcoin claim it is steadily establishing itself as a reliable hedge against ongoing market instability, particularly in light of recent US trade tariffs.
The volatility witnessed recently began with President Trump’s announcement of reciprocal tariffs on April 2, a date that has drawn significant attention from market analysts. Following that announcement, the Bloomberg Dollar Index took a notable hit, recording a decline of over 4%, signalling major shifts in trading behaviours. In contrast, Bitcoin has surged by about 12% since the start of April, drawing attention amid fears about US fiscal practices.
April presented a change in investor interest as around $2.9 billion flowed into US-listed Bitcoin spot ETFs, reversing a downturn noticed in previous months. This outpour is indicative of a growing trend, as more investors are coveting Bitcoin due to prevailing economic uncertainties and the prospect of the Fed maintaining its independence.
However, analysts observe a divergence from the previous rising trends, with ongoing economic pressures offering fresh challenges to cryptocurrencies. The Fed faces serious scrutiny, as some market indicators suggest that rate cuts may not be forthcoming, even amid pressures to raise concerns.
There’s been a notable uptick in the spot cryptocurrency markets while demand for derivative trading remains low. Calls for investment in Bitcoin and Ether ETFs surged beyond $3.2 billion recently, reflecting a strong investor appetite despite broader market hesitance. The technical indicators for Bitcoin appear to be in a puzzling state: oscillators hint at a neutral stance, while moving averages indicate buy signals.
So, while Bitcoin paints a mixed picture, many factors continue to tug at its price. Market participants are weighing the potential for upward movement against established bearish sentiments as financial landscapes remain tumultuous. Investors might want to keep an eye on these lucrative ETF opportunities that could reshape how cryptocurrencies like Bitcoin are traded on the market.
