The cryptocurrency market erupted in a frenzy Tuesday as Bitcoin surged past $93,000, fuelled by optimism over easing U.S.-China trade tensions.
Altcoins like Ethereum and Dogecoin joined the rally, while stocks and gold swung wildly. But beneath the euphoria, analysts warn of fragile conditions that could halt the momentum.
Bitcoin Hits Six-Week High on Tariff Talk
Bitcoin rocketed to $93,400 Tuesday afternoon, its highest level since early March, after President Trump hinted at “substantial” tariff cuts on Chinese imports. Treasury Secretary Scott Bessent called the current U.S.-China tariff standoff “unsustainable” during a private JPMorgan event, sparking hopes for a near-term de-escalation.
Investors flocked to risk assets as Trump clarified tariffs would drop from today’s 145% rate. Additionally, he dismissed rumours of ousting Fed Chair Jerome Powell, calming markets further. “This rally is driven by relief,” said a QCP Capital analyst. “Trade peace could unlock global capital flows.”
Altcoins Ride the Wave
Ethereum surged 8% to breach $1,700, while Dogecoin and Sui’s SUI token leapt 8.6% and 11.7%, respectively. The rally mirrored gains in traditional markets: the S&P 500 and Nasdaq climbed 2.5% and 2.7%, recovering from Monday’s slump. Gold, however, tumbled 1% after hitting a record $3,500 earlier, signalling shifting investor priorities.
Institutional demand also rebounded. U.S. Bitcoin ETFs saw $381 million in net inflows Monday, their strongest since March. “The Coinbase premium is back,” noted QCP, referring to heightened buying activity among American institutions.
Behind the Tariff Truce Optimism
Trump’s tariff remarks mark a stark shift. Since January 2025, his administration hiked China’s rates to 145%, citing trade imbalances and drug-related concerns. Critics argued the move strained U.S. households, which faced an estimated $1,300 annual tax hike from tariffs.
Yet Tuesday’s comments suggested a change. While independent confirmation remains pending, markets reacted swiftly. “This isn’t just about tariffs,” said a CryptoQuant analyst. “It’s about restoring confidence in risk assets.”
Stocks, Gold, and Crypto
As Bitcoin soared, gold’s sharp reversal highlighted competing safe-haven dynamics. Equities also rebounded, with tech stocks leading the charge. Furthermore, stablecoin Tether’s market cap grew $2.9 billion in two months, a positive sign, but still below the $5 billion threshold historically linked to sustained crypto rallies.
“Capital is rotating,” explained QCP. “Investors want hedges against dollar volatility, and Bitcoin’s winning that race.”
CryptoQuant Flags Hidden Risks
Not all signals are bullish. Bitcoin’s demand has dropped by 146,000 BTC over 30 days, per CryptoQuant, while its “bull score” hit October 2024-level lows, a bearish omen. The firm also noted weak liquidity, with Tether’s growth lagging behind historical trends.
Furthermore, Bitcoin faces stiff resistance near $92,000, a level where traders historically cash out. “This rally lacks foundational strength,” warned CryptoQuant. “Without renewed demand, a pullback is likely.”
What Comes Next for Markets?
The tariff policy remains fragile. While Trump’s rhetoric lifted spirits, no formal agreement exists yet. Previous tariff pauses, like April 9’s 90-day rollback for allies, collapsed within weeks. Meanwhile, China’s 125% retaliatory tariffs and rare earth export curbs linger.
For Bitcoin, breaking $93,500 could trigger a run toward $100,000. Conversely, failure to hold gains might see it retest $85,000. “Markets are pricing in optimism, not reality,” cautioned an analyst. “Trade talks could drag on for years.”
The Bottom Line
Tuesday’s rally underscores how geopolitics increasingly drive crypto markets. While Trump’s tariff shift ignited bullish bets, underlying fragility warns against unchecked euphoria. Investors now await concrete policy moves, not just promises, to sustain momentum. As one trader put it, “Enjoy the surge, but keep an eye on the exits.”
