Key Takeaways
- US Treasury Secretary Scott Bessent declared the US-China trade tariffs standoff unsustainable during a closed-door event.
- President Trump responded that US tariffs on China “will come down substantially” from the current 145%.
- Despite the price jump, on-chain data points to potential market fragility, according to CryptoQuant.
The price of Bitcoin surged 7% to $93,570 during Tuesday trading amid renewed investor optimism and hopes that the tension caused by the US-China trade tariffs would ease.
According to crypto analytical company CryptoQuant, the bullish Bitcoin was motivated by remarks citing US Treasury Secretary Scott Bessent, who told investors at a closed-door meeting in a JPMorgan event that the tariff standoff with Beijing was unsustainable.
Trump Reinforced the Views of Bessent
According to Bessent, there was a move towards de-escalation shortly, referring to the conditions surrounding the US-China trade tariffs as an embargo. Nonetheless, Bessent said it would take a long time before a comprehensive agreement between the two countries could exist.
Talking to reporters later at the White House, President Donald Trump reinforced Bessent’s views regarding the US-China trade tariffs, stating that they would come down substantially from the current 145%, dispelling sentiments about an emerging trade war with Beijing. The US president also explained that even after he had remarked on Federal Reserve Chair Jerome Powell regarding the need to lower interest rates, he had no intention of firing him.
Altcoin Market Also Benefited
The crypto rally that analysts believe was triggered by the potential easing of tensions surrounding the controversial US-China trade tariffs wasn’t limited to the flagship cryptocurrency. The altcoin market had a similar reaction, with Ethereum (ETH) rising 8% to trade above $1,700, while Dogecoin (DOGE) and Sui (SUI) gained 8.6% and 11.7%, respectively. The sudden price hike precipitated losses for traders in short positions, with over 581 million in futures being liquidated over 24 hours.
As the short-term traders bore the brunt of a bullish crypto market, data from Coinglass suggests that long-term holders had accumulated profits. Data analyst CryptoQuant suggested that the Net Position Change for long-term holders had turned positive for the first time since the local peak.
Market Remains Fragile
Despite Bitcoin’s bullish tendency, crypto analyst CryptoQuant said the market remained fragile beneath the surface. The firm stated that the demand for BTC had decreased by at least 146,000 BTC in the last 30 days—an improvement compared to the sharp drop in March, but still negative. The report says the demand momentum metric has deteriorated further to a bearish level since October 2024.
Conclusion
According to the ongoing sentiment, Bitcoin is establishing upward momentum, demonstrating a strong bullish sentiment. There is every chance that the asset could break the key resistance level at $93,857 and hit a new high on its way back to the six-figure price. If Trump reduces the trade tariffs on Chinese goods, it could translate to a gain for Bitcoin due to renewed investor confidence.
Frequently Asked Questions
Will tariffs directly affect Bitcoin?
Bitcoin may not be highly exposed to risks from the new tariffs. However, holders could be highly exposed to indirect risks, like those originating from a sharply contracting global or domestic economy.
What factors affect Bitcoin prices?
The price of Bitcoin is affected by its supply (scarcity), the market’s demand, media and news, and regulatory changes.
What causes crypto to go up and down?
The value of cryptocurrencies depends on their demand and whether the supply can meet the demand, much like any other goods people trade. Generally speaking, if the demand outpaces the supply, the value increases. Most cryptocurrencies implement mechanisms to limit supply and prevent inflation.
