Bitcoin Surges Towards $95,000 Amid Market Rally and ETF Inflows

Bitcoin has risen for the third day, reaching $93,660 amid market optimism following President Trump’s softer approach on tariffs. The cryptocurrency is recovering losses from January and is attracting significant ETF inflows, suggesting it may serve as a hedge against economic uncertainties. However, long-term demand growth needs to be addressed for sustained price increases.

Bitcoin has experienced a price increase for the third consecutive day, propelled by a broader market rally influenced by President Donald Trump’s softened stance on China tariffs and Federal Reserve Chair Jerome Powell. Currently, Bitcoin is priced at approximately $93,660, marking a 2.4% rise, with earlier peaks of $94,499.86, a level not seen since early March. This upturn has allowed Bitcoin to recover over half of its losses since Inauguration Day, with its year-to-date performance remaining nearly flat.

Market strategist Joel Kruger from LMAX explained that the recent price surge reflects investors seizing the opportunity to invest in Bitcoin, which is increasingly seen as a robust option for portfolio diversification amidst macroeconomic instability and fluctuations in the U.S. dollar. On Tuesday, the popularity of Bitcoin as a hedge grew, evident from a significant increase in inflows into exchange-traded funds (ETFs) tracking Bitcoin’s price, which saw $936.43 million in daily inflows—the highest since mid-January.

The current rally has also pressured short sellers to exit positions, contributing further to Bitcoin’s upward momentum. Within the past 24 hours, short liquidations have amounted to over $300 million across various exchanges, as reported by CoinGlass. Although the monthly demand for spot Bitcoin has shown signs of contraction, recent trends indicate a slowdown in this decline, alleviating downward price pressure. Julio Moreno, CryptoQuant’s head of research, cautions, however, that demand indicators must improve significantly to sustain the rally and achieve new all-time highs, particularly by late 2024.