Bitcoin Nears All-Time Highs Ahead of Tariff Implementation
Bitcoin (BTC) edged close to $85,000 on Tuesday as traders brace for the impact of American tariffs coming into effect on Wednesday. Despite a general “risk-off” sentiment in the markets, Dogecoin (DOGE) and Cardano (ADA) recorded gains of over 2.5%, while Bitcoin ended the quarter with an 11% decline.
Long-term Bitcoin holders and significant new investors are displaying resilience, holding their positions and thereby providing stability to the Bitcoin price.
According to Augustine Fan, Head of Analysis at SignalPlus, the lack of new catalysts, such as large inflows into ETFs, along with a market lacking conviction, contributed to the end of a tumultuous quarter, with an 11% decline for BTC and the largest drop for the S&P 500 since the second quarter of 2022.
Significant Drop in Selling Pressure
According to CryptoQuant data, the average daily sales volume on major exchanges decreased from 81,000 bitcoins to just 29,000 bitcoins. This significant drop in selling pressure hints at a possible supply shortage, with more sustained demand.
“The average selling pressure on major platforms dropped from 81,000 to 29,000 bitcoins per day. We are entering an asymmetric demand zone.”
Axel Adler Jr., an analyst at CryptoQuant, sees this development as a particularly positive signal for Bitcoin’s future. Investors now appear more inclined to hold onto their BTC rather than sell them, potentially fostering a new bullish phase.
Another interesting indicator relates to the Bitcoin futures market. After a significant expansion following the price surge in February, short positions are starting to weaken. This suggests a shift in dynamics, with investors less likely to bet on a price drop.
Additionally, the growing role of institutional exchange-traded funds (ETFs) in the BTC market could also play a stabilizing role. These institutional investors are more sensitive to macroeconomic events, such as Federal Reserve decisions or inflation figures, than the retail market.
Another notable fact is that the Binance platform has seen its spot transaction volume multiplied by eight compared to Coinbase recently. According to CryptoQuant analysts, this trend has often preceded significant Bitcoin price increases in the past.
“This indicator is turning positive again, meaning Binance’s volume consistently surpasses that of other platforms. The last time this happened, in January 2024, Bitcoin was trading around $42,000 before surging later.” Joao Wedson, analyst at CryptoQuant.
Will Tariffs Push BTC Below $80,000 ?
Indeed, not all signals are positive. Persistent inflation and new trade tensions could weigh on risk assets like Bitcoin in the short term. Analysts from 10x Research anticipate a drop below the $80,000 mark in the coming days.
Nevertheless, the significant drop in selling pressure and promising signs in the futures market suggest a healthy consolidation phase before perhaps Bitcoin’s next bullish episode.
On the other hand, analyst Severino indicates a bearish signal for the medium term. Although he predicts a rise to $94,000 in the days ahead, he notes that the Fisher signal recently turned bearish:
“The 12-week Fisher Transform of BTC has turned bearish. The Fisher Transform converts prices to a Gaussian normal distribution to smooth price data and filter noise, generating clear signals to identify major market turning points.” he writes.
Although the crypto market is currently in a volatile phase due to economic uncertainties, long-term prospects remain positive. However, signals are diverging between short-term bullish and medium-term bearish. Trump’s tariff announcement could add fuel to the fire.
