Bitcoin Rises Sharply As The U.S. Seeks To Reduce Trade Tensions And The Fed

Bitcoin continues to be bullish after U.S. President Donald Trump announced he has no intention of firing Federal Reserve Chairman Jerome Powell, easing concerns about the central bank’s autonomy. The largest cryptocurrency rose about 3% before trimming some gains to trade at $93,804 as of 7:28 AM in London on Wednesday. Smaller tokens including Ether, XRP, and Solana also rose. Bitcoin reached a peak of $90,000 on April 22, a sign that it is breaking away from the long-standing trend of moving in the same direction as U.S. stocks. However, after that, this token increased alongside stocks and the dollar following Trump’s comments on Powell and in the context of optimism that trade tensions may be easing. Finance Minister Scott Bessent stated at a closed summit with investors on Tuesday that both sides cannot maintain the stalemate over tariffs with China and that the two largest economies in the world will have to find ways to de-escalate. Bitcoin exchange-traded funds listed in the United States raised a total of $936 million on Tuesday, marking the third-highest capital inflow for this group this year. Another driver for cryptocurrency has emerged in the form of a report indicating that Cantor Fitzgerald LP, Tether Holdings Ltd., and SoftBank Group are negotiating to establish a $3 billion company that will absorb billions of dollars in cryptocurrency. But Stefan von Haenisch, the head of OTC trading in the Asia-Pacific for the cryptocurrency custodian Bitgo Inc., said the cryptocurrency rally could be heading for a correction over the weekend. He noted that the market “has been rising continuously and feels a bit overbought here,” adding that a pullback to at least $88,000 for Bitcoin “would not be surprising.” QR Capital, a cryptocurrency asset management company based in Brazil, stated in a note that they have observed “a sharp decline in spot trading volume on centralized exchanges, with liquidity shifting to the futures market.”

This indicates that investors “are seeking leverage for more aggressive positions in cryptocurrencies,” the report adds. “While this reflects confidence, it also increases the risk of a sharp correction: excessive leverage can lead to mass liquidations if there is a sudden reversal in market sentiment.”