Crypto Markets Surge Following Tariff Pause Extension
Record High for Bitcoin at $105K prolonged amid U.S.-China tariff truce pause; speculation stirs over $120K milestone ahead?
After the U.S. announces that tariffs on China will remain, Bitcoin price rockets up $2,000 in minutes! Market optimism is growing as trade tensions cool, leading to a potential rally before the July 8 cut-off for fresh trade deals.
Ethereum, Solana, and other altcoins join the party, as investors react to the positive news. Crypto market analysts believe this could be the perfect opportunity for Bitcoin to test new all-time highs.
Bitcoin Booms After Tariff Pause
Following the Office of the U.S Trade Representative's announcement, Bitcoin surged from $103,100 to $105,400 in just one hour! This marked the largest hourly increase in over two weeks. Traders are capitalizing on optimism over de-escalating trade tensions between the world's two economic giants.
In the past, similar macroeconomic conditions have seen Bitcoin soar, with the April tariff delay causing prices to skyrocket from $74,500 to over $111,000 in a matter of weeks. The same could happen again with Bitcoin poised to make a fresh attempt at breaking its all-time highs.
Ethereum and More Altcoins Rise
Ethereum saw a 2.67% increase, reaching $2,606.89, while Solana gained nearly 3.2%. Avalanche, XRP, and Dogecoin also experienced intraday gains between 1.5% and 2.4%.
Lina Zhang, senior analyst at CryptoQuant, describes the market sentiment as follows, "With fewer uncertainties on the macro front, crypto can breathe."
Trade Deal Deadline Looms Large
July 8 is the deadline for the Trump administration to finalize trade deals with major partners, including China. Should an agreement not be reached by then, tariffs could automatically revert to their previous states.
This pressure-filled period has both financial and diplomatic worlds on edge, with crypto traders keeping a close watch for any progress before July 8. A successful round of negotiations could trigger further rallies in the market.
Legal Uncertainty Fuels Volatility
Recent court decisions have given judges the power to rule Trump's tariffs as unlawful under the International Emergency Economic Powers Act (IEEPA). Trump has appealed these decisions, but a final ruling has yet to be made. This new development could impact both current and future tariffs, adding to the volatility of cryptocurrency markets.
Crypto's Macro Sensitivity Explained
Changes in global commerce and monetary policy can have a huge impact on cryptocurrencies, with Bitcoin often acting more like a commodity than a currency. Past tariff delays have resulted in positive price moves for Bitcoin, as these shake-ups in traditional markets lead to changes in market sentiment.
With the Federal Reserve indicating that it will not raise interest rates any further and inflation cooling in key markets, the stage is set for a new bull run.
Will Bitcoin Reach $120K Before August?
With Bitcoin currently hovering above $105K and the July 8 deadline just over a month away, speculation now centers around whether Bitcoin can reach the $115K-$120K range within the next month. According to Glassnode data, whale activity and open interest on Bitcoin futures are on the rise, indicating that institutional demand remains strong.
Binance's order book data suggests that the next significant resistance for Bitcoin lies around $109,800. Options traders are also increasingly betting that Bitcoin will surpass $115K by mid-July.
Investor Sentiment: Greed is Back
The Crypto Fear & Greed Index has returned to "Greed" territory, having recently been in "Neutral." Following the tariff announcement, the index jumped from 52 to 69, signifying growing investor optimism about the cryptocurrency market. In addition, inflows into spot Bitcoin ETFs have resumed, with BlackRock's iShares Bitcoin Trust (IBIT) seeing $140 million in a single day, its highest level since mid-May.
Tariffs, Markets, and the Future of Decentralization
Though tariffs may seem purely geopolitical, their implications for decentralized markets can be significant. The current policy pause gives both negotiators and investors time to assess risk exposure across various assets, with Bitcoin increasingly playing a pivotal role in global financial dynamics. Each development in Washington and Beijing can create ripples far beyond Wall Street.
- Bitcoin surged from $103,100 to $105,400, marking the largest hourly increase in over two weeks, following the extension of tariff pause.
- Ethereum saw a 2.67% increase due to the positive news, reaching $2,606.89, and other altcoins like Solana, Avalanche, XRP, and Dogecoin also experienced gains.
- Analysts suggest this could be an ideal opportunity for Bitcoin to test new all-time highs, as tariff pauses have historically caused Bitcoin prices to soar.
- The looming deadline of July 8 for the Trump administration to finalize trade deals, including with China, has both financial and diplomatic worlds on edge, with crypto traders keeping a close watch for any progress before then.
- Legal uncertainty fuels volatility in cryptocurrency markets, as recent court decisions have given judges the power to rule Trump's tariffs as unlawful, but a final ruling has yet to be made.
- Speculation is growing that Bitcoin may reach the $115K-$120K range before August due to increasing whale activity and open interest on Bitcoin futures, as well as growing investor optimism, indicated by a rise in the Crypto Fear & Greed Index and inflows into spot Bitcoin ETFs.
