Bitcoin’s price surged above $93,500 amid easing U.S.–China trade tensions and a softer tone on Fed leadership from President Trump. Analysts suggest that the M2 money supply increase could lead to further price rises for both Bitcoin and gold. Despite caution from some traders, the overall macro sentiment appears to be shifting positively for Bitcoin.
On Tuesday, Bitcoin briefly surpassed $93,500, marking a new monthly high, driven by easing U.S.–China trade tensions and a more conciliatory approach from U.S. officials regarding the Federal Reserve leadership. This positive sentiment has led to increased investor interest in both Bitcoin and gold, which recorded significant price movements during this period.
The positive shift in market sentiment followed comments from U.S. officials that reduced fears about the ongoing trade war and indicated a softer approach from President Trump regarding the potential ousting of Federal Reserve Chair Jerome Powell. This combination of events has contributed to a rally across risk assets, particularly Bitcoin and gold.
Bitcoin’s intraday gain of 4.7% coincided with wider macroeconomic trading trends. Gold initially surged to $3,500 but subsequently fell back to around $3,300, which analysts view as indicative of a potential rotation of capital towards digital assets.
Ryan McMillin from Merkle Tree Capital noted that while Bitcoin and gold both respond to global M2 money supply growth, gold tends to show a quicker reaction, whereas Bitcoin may lag by approximately 90 days. Historically, strong upward trends in gold have presaged significant rallies in Bitcoin, suggesting a potential future price increase for Bitcoin.
McMillin pointed out that gold’s recent decline might suggest investors are shifting their focus toward Bitcoin, which is perceived as undervalued amid rising inflation and money supply expansion. Fears of an ongoing global trade war underscore the role of government monetary policies, particularly the increase in M2 supply, which could benefit both gold and Bitcoin.
Looking ahead, Bitcoin’s market dynamics may be influenced by the Federal Reserve’s forthcoming interest rate decisions and the ongoing fiscal discussions between the U.S. and China. Meanwhile, some traders express caution due to high funding rates and a decrease in on-chain activity, both of which could act as obstacles for Bitcoin’s upward momentum. Nevertheless, in the current macroeconomic landscape, sentiments seem to be shifting favourably for Bitcoin.
