Bitcoin (BTC) surged to $85,000 today as investors prepare for the potential impact of U.S. tariffs set to go into effect tomorrow.
The rally comes amid heightened risk aversion in global markets and a slide in U.S. stocks: The S&P 500 fell 3% last week, its worst performance since September 2023. Meanwhile, investors flocked to safe-haven assets, pushing gold to all-time highs.
The impending tariffs, combined with a series of US economic and labor reports, have created an atmosphere of caution in the crypto market. Augustine Fan, director of analytics at SignalPlus, attributed the uncertainty in the market to a lack of new catalysts such as significant ETF inflows and a general lack of confidence among investors.
“Positioning data is merely a statement on market conditions, not necessarily a signal for a tradable setup,” Fan said. He noted that while the market currently lacks the momentum for a sustained rally, any bullish swing could be sharp due to prolonged shorting in Bitcoin futures.
On the futures front, speculative positions on BTC via the Chicago Mercantile Exchange (CME) have turned into their most bearish position in years, a stark contrast to the bullish sentiment seen in January. Despite this, long-term holders appear resilient, according to blockchain analytics firm Glassnode. Its data shows that investors who have held Bitcoin for 3-6 months are making increasing profits and trading at the lowest levels since June 2021, suggesting confidence rather than panic selling.
Newer institutional investors, or “whales,” who have acquired large Bitcoin positions in recent months have also maintained their presence, reinforcing a stable price base for the cryptocurrency.
Jupiter Zheng, a partner at HashKey Capital Liquid Fund and Research, sees the current market decline as a temporary response to economic uncertainty.
“The decline is mainly due to risk-off sentiment,” Zheng said. “However, we remain optimistic in the long term as more institutions integrate crypto and global regulators introduce policies to encourage adoption.”
*This is not investment advice.
