Bitcoin (BTC) rose above $93,000 on Tuesday afternoon, rising nearly 7% amid renewed investor optimism and renewed hopes for easing trade tensions between the US and China, but there are obstacles that could limit further growth, the analytical company CryptoQuant warned, UNN writes with reference to CoinDesk.
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Markets were inspired by remarks by US Treasury Secretary Scott Bessent, who reportedly told investors at a closed JPMorgan event that a tariff standoff with China was unsustainable. Bessent said de-escalation would occur "in the near future," describing current conditions as a "trade embargo." However, he warned that a more comprehensive agreement between the two countries could take even years.
Then President Trump, speaking to reporters at the White House later in the day, said that US duties on China would "significantly decrease" from the current level of 145%, which dispelled fears about the build-up of a trade war.
He also added that he has no intention of firing US Federal Reserve Chairman Jerome Powell after recent pressure on the US central bank head to lower interest rates.
The largest cryptocurrency by market capitalization rose to just under $93,400 after Trump's comments, the highest price since early March. Altcoins followed BTC's growth: ether (Ethereum, ETH) rose by 8% in 24 hours above $1,700, and Dogecoin (DOGE) and Sui's own token (SUI) rose by 8.6% and 11.7% respectively. The CoinDesk 20 cryptocurrency index rose by 5.2%.
Stocks recovered after a decline the day before: S&P 500 and technology Nasdaq ended the session 2.5% and 2.7% higher, respectively.
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"Amid capital returning to safe assets and inflation hedging assets, BTC and gold are proving to be key beneficiaries of the outflow from dollar risk," analysts at hedge fund QCP Capital said in a Telegram broadcast.
They emphasized the recovery of inflows into spot exchange-traded funds (ETFs) BTC listed in the US and the return of the so-called Coinbase price premium, indicating demand from US institutional investors. According to Farside Investors, on Monday, net inflows into BTC ETFs amounted to more than $381 million, which added to $107 million on Thursday.
Despite the price jump, blockchain data indicates fragility beneath the surface, CryptoQuant analysts said in their report on Tuesday.
Apparent demand for bitcoin has decreased by 146,000 BTC in the last 30 days - an improvement compared to the sharp drop in March, but still negative. The report highlights that CryptoQuant's demand momentum metric, which tracks the interest of new investors, has deteriorated further to a bearish level since October 2024.
Market liquidity remains weak, with the growth of USDT market capitalization used in the report as an indicator of crypto-liquidity. In the last two months, USDT has grown by $2.9 billion, which is below its 30-day average. Historically, BTC rallies coincided with USDT growth above $5 billion, a threshold that has not yet been reached, the publication writes.
In addition to caution, bitcoin now faces a key resistance zone between $91,000 and $92,000 near the "on-chain trader realized price" metric, a level that often served as resistance in bearish conditions. CryptoQuant's on-chain rating classified current market conditions as bearish, suggesting that a pause or pullback may occur if sentiment weakens, the publication notes.