TLDR:
- Bitcoin surged past $93,000 on Tuesday amid optimism over improving US-China trade relations
- Treasury Secretary Scott Bessent called the current 145% tariffs “unsustainable” while Trump said they “will come down substantially”
- Institutional investors showed renewed interest with Bitcoin ETFs recording $381 million in net inflows on Monday
- Altcoins followed Bitcoin higher with Ethereum, Dogecoin, and SUI gaining 8%, 8.6%, and 11.7% respectively
- On-chain data suggests potential market fragility with Bitcoin facing resistance despite the rally
Bitcoin surged past $93,000 on Tuesday, reaching its highest point since early March amid renewed optimism about US-China trade relations. The rally was fueled by comments from Treasury Secretary Scott Bessent and President Donald Trump suggesting a de-escalation in trade tensions between the world’s two largest economies.
Bitcoin climbed nearly 7% in 24 hours, while the broader crypto market also saw major gains.
The rally was triggered by Bessent’s remarks at a closed-door JPMorgan event where he reportedly told investors that the current tariff standoff with China was “unsustainable.”
Bessent indicated that de-escalation would come “in the very near future,” though he cautioned that a more comprehensive deal could take years.
President Trump later reinforced this sentiment when speaking to reporters at the White House. He stated that US tariffs on China “will come down substantially” from the current 145% level, helping to ease concerns about an escalating trade war.
Institutional Money Returns to Crypto
The positive market sentiment was reflected in renewed institutional interest in cryptocurrency. Bitcoin ETFs recorded over $381 million in net inflows on Monday, adding to Thursday’s $107 million, according to data from Farside Investors.
This influx of institutional money represents the highest level of ETF inflows since January. Additionally, the return of the Coinbase price premium suggests increased demand from American institutional investors.
MicroStrategy, one of the largest corporate holders of Bitcoin, further reinforced long-term confidence in the cryptocurrency by adding another 6,500 BTC to its holdings. This move highlights continuing institutional belief in Bitcoin as a store of value.
Altcoins Join the Rally
The positive momentum extended beyond Bitcoin, with altcoins posting strong gains as well. Ethereum (ETH) rose 8% over the past 24 hours to trade above $1,700, while Dogecoin (DOGE) and Sui’s native token (SUI) gained 8.6% and 11.7%, respectively.
The meme coin sector was especially strong, jumping over 15% according to market data. Other sectors including AI and Real-world asset (RWA) tokens also posted solid gains during the market upswing.
The rally caught many traders off guard, resulting in over $581 million in futures liquidations in 24 hours. Short traders were hit the hardest, with over $504 million in liquidated positions as prices surged higher than expected.
Caution Signs Remain
Despite the positive price action, not all indicators point to a sustained breakout. On-chain data analysis from CryptoQuant suggests underlying market fragility that could limit further upside.
Bitcoin’s apparent demand has decreased by 146,000 BTC over the past 30 days. While this represents an improvement from the sharp drop in March, demand remains in negative territory.
Market liquidity also remains soft. Using USDT’s market cap growth as a proxy for crypto liquidity, analysts note that USDT grew by $2.9 billion over the past two months, below its 30-day average. Historically, Bitcoin rallies have coincided with USDT growth above $5 billion, a threshold not yet reached in the current market.
Adding to the caution, Bitcoin is now facing a key resistance zone between $91,000 and $92,000 at the “Trader’s On-chain Realized Price” metric. This level has often served as resistance in bearish conditions, suggesting a pause or pullback could follow if sentiment weakens.
Data also shows diverging behaviors between different investor groups. The Net Position Change metric indicates that long-term holders (those holding BTC for more than 155 days) have begun accumulating Bitcoin while short-term holders continue to sell. This pattern hints at renewed interest among experienced investors even as newer market participants take profits.
The broader financial markets also rebounded alongside cryptocurrencies. The S&P 500 and the tech-heavy Nasdaq finished Tuesday’s session 2.5% and 2.7% higher, respectively. Gold, meanwhile, reversed from its record price of $3,500 during the day and was down 1%.
The parallel moves in both crypto and traditional markets suggest that Bitcoin’s brief period of “decoupling” from US stocks was short-lived. Both asset classes appear to be responding similarly to the improved outlook for US-China trade relations.
As capital rotates into alternative assets, “BTC and gold are proving to be key beneficiaries of the exodus from USD risk,” according to analysts at hedge fund QCP Capital.
The regulatory environment may also be contributing to improved market sentiment. Newly appointed SEC Chairman Paul Atkins has already dismissed several crypto enforcement cases, giving the industry hope for a more innovation-friendly regulatory climate going forward.
