Bitcoin Price Breaks $87,000 Mark for the First Time Since "Trump Liberation Day"
After "Liberation Day, key market sentiment indicators such as the Fear and Greed Index and S&P 500 RSI(14) have bottomed out," an analyst told Decrypt. On Monday during the Asian trading session, Bitcoin price surpassed $87,600, reaching a new high since early April. Analysts say investors are accelerating fund transfers to hard assets as inflation concerns persist.
This round of increase is mainly due to "global liquidity rising, driven by M2 money supply expansion and US dollar weakness," Kronos Research's Chief Investment Officer Vincent Liu revealed to Decrypt. M2 monetary indicator refers to asset forms with slightly lower liquidity than cash, such as savings accounts and money market funds.
Bitcoin rose approximately 3.6% in the past 24 hours, with trading volume reaching at least $24.5 billion, outperforming other non-stablecoin cryptocurrencies during the Asian afternoon trading session.
Liu noted that the increasingly loose financial environment is prompting investors to "shift towards hard assets like Bitcoin and gold". Gold broke through $3,400 per ounce for the first time in the Asian trading session, with its year-to-date increase expanding to 29% according to Trading Economics data.
New Bitcoin Bottom Formed
These new highs appeared less than a month after the former president Trump's so-called "Liberation Day tariffs", which caused "overall asset prices to drop sharply", Tiger Research's Chief Analyst Ryan Yoon told Decrypt.
During this period, "key sentiment indicators like the Fear and Greed Index and S&P 500 RSI(14) established a bottom", Yoon said. Subsequently, investors began "seeking rebound opportunities, seemingly shifting funds towards Bitcoin", which he believes has "higher growth potential than gold".
The Relative Strength Index (RSI) mentioned by Yoon is used to track market momentum, typically measured over a 14-day cycle to assess securities (in this case, the S&P 500 index).
As funds move towards Bitcoin, the US Dollar Index (DXY) plummeted to 98.5, reaching a new low since February 2022. Previous reports suggested that President Trump is considering replacing Federal Reserve Chairman Powell. The index has dropped approximately 10% over the past three months.
Leveraging this momentum, the market "achieved initial recovery" after Trump announced on April 10th a 90-day tariff exemption for countries without retaliatory measures. Consequently, "on-chain indicators like NUPL and MVRV-Z" also showed signs of improvement, Yoon added.
Investors need to develop strategies "aligned with their risk tolerance and investment objectives" to prepare for the "short-term volatility" Yoon referred to.
Coinglass data shows institutional confidence is recovering, though progress is slow when viewed through Bitcoin spot ETF fund flows. Last week, Bitcoin ETF saw a net inflow of $12.7 million, barely reversing the previous week's net outflow, but still the lowest weekly inflow this year.
"The correlation between Bitcoin, gold, and stocks is worth close attention," a QCP Capital analyst noted in the April 21st Asian market briefing, "The narrative of Bitcoin as a safe-haven asset or inflation hedge is heating up again. If this trend continues, it may provide new momentum for institutional Bitcoin allocation."
However, analysts remain cautious about whether a new bull market has begun. Kronos Research's Liu stated that this "depends on the signals released by the Federal Reserve's FOMC meeting on May 6-7". If the Fed adopts a dovish stance, it could "maintain fund inflows", and "clear trade policy guidelines" might provide overall market stability.
