Bitcoin Stabilizes Due to Tariff Truce

After Powell's Speech, Bitcoin Finds Relief in Trade Talks Between Powers, While Traders Await a Breakout

The price of Bitcoin (BTC) experienced a slight rebound this Wednesday, registering gains of 1.09% to close at $84,947. The world's leading cryptocurrency found support in the optimism generated by trade talks between the United States, Japan, and Italy regarding potential tariff negotiations. This boost allowed Bitcoin to partially reverse the rejection it suffered the previous day, following Federal Reserve Chairman Jerome Powell's reaffirmation of a restrictive interest rate policy.

Bitcoin has been trading sideways since April 12, when it encountered resistance in the $85,500 price zone / TradingView

Sideways and Key Resistance: Heading for a Breakout?

Bitcoin has been trading sideways since April 12, when it encountered resistance in the $85,500 price zone. The cryptocurrency continues to struggle to break above the 50-period exponential moving average (50EMA), located at $85,400, which acts as dynamic resistance. Nearby is the 200-period EMA at $85,000. The Bitcoin price remains slightly below these two trend lines, indicating short-term bearish sentiment. Wednesday's rally lacked momentum and failed to break these resistance zones due to low trading volume on the Binance exchange, well below the 25-day average. ETF trading volume was also low.

Bitcoin: Safe Haven in the Tariff Storm

Despite the uncertainty, Bitcoin continues to be perceived as a safe haven within the crypto sector amid the growing tension generated by the tariff war between the United States and China. Over the past 30 days, a clear "Bitcoin Season" has been observed, with investors preferring to accumulate the leading cryptocurrency over altcoins. This suggests that Bitcoin is considered a safer asset compared to altcoins, which are perceived as riskier cryptocurrencies. Coinmarketcap's "Altcoin Season" index stands at just 17 points, far from the 75 threshold that would indicate a favorable season for altcoins. Despite recording losses over the past three months, Bitcoin is among the cryptocurrencies with the smallest declines.

Reduced Volatility and Consolidation Range

In recent weeks, Bitcoin's volatility has decreased significantly, indicating that traders are waiting for a breakout from the narrow range it is trapped in, with a high of $86,500 and a low of $83,100. Breaking through these levels will be crucial in determining the direction of the next price move.

Positive ETF Capital Flow and AUM Stabilization

Over the past week, net capital flow into Bitcoin ETFs turned slightly positive, with an inflow of $12.7 million, halting a streak of continuous outflows that had been ongoing since April 3. While ETF trading volume fell to October 2024 lows prior to the significant November bull run, digital assets under custody (AUM) managed to stabilize and record a slight recovery from early April, rising from $91.38 billion to $97.88 billion in just ten days. ETF market capitalization has remained stable around $96.36 billion since the beginning of March. The ETF with the largest amount of Bitcoin under custody remains Blackrock's IBIT, with 572,230 BTC, according to Coinglass data.

Bitcoin's slight rebound, driven by optimism in trade talks, contrasts with the pressure exerted by the Fed's restrictive policy and persistent technical resistance. The preference for Bitcoin as a safe haven in the crypto market amid trade tensions suggests widespread caution toward altcoins. The low volatility and narrow trading range indicate potential accumulation before a significant move. Investors will be watching for a clear breakout of key resistance levels and developments in trade negotiations to determine Bitcoin's next course.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency trading is highly volatile and carries significant risks, including the total loss of your invested capital. Consult a financial advisor before making any investment decisions.