Bitcoin Surges 10% to $87,000 Reversing Trump Sell-Off

QCP, a prominent market observer, noted that Bitcoin experienced a significant rally during the Easter period, reaching over $87,000 during the Asian morning session. This surge effectively reversed the sell-off that was triggered by former U.S. President Trump's unexpected "Liberation Day" announcement on April 2nd. The rally was particularly notable as it reclaimed most of the decline, showcasing Bitcoin's resilience and potential as a safe haven asset.

This performance was not isolated to Bitcoin alone. Gold also surged to a historical high due to escalating trade tensions and a weakening U.S. dollar. The stock market closed lower last week, continuing its downward trend in April, which brought renewed attention to Bitcoin as a potential safe haven asset or inflation hedge tool. If this trend persists, it could provide a new tailwind for institutional investors to allocate more funds to Bitcoin.

There are already preliminary signs of renewed institutional confidence in Bitcoin. Last week, net inflows into spot Bitcoin ETFs turned positive, with a net inflow of $13.4 million, a stark contrast to the net outflow of $708 million in the previous week. In the options market, position allocation has become more balanced, with risk reversal indicators across different maturities stabilizing. This deviation from the short-term bearish skew seen in the past few weeks suggests a more optimistic outlook among institutional investors.

The simultaneous rise in Bitcoin and gold raises the question of whether this is merely holiday-driven noise or a significant transformation of Bitcoin as a safe haven asset. The latter would mark a substantial shift in traditional finance's view of Bitcoin. As Europe is still on holiday, market confirmation may take several trading days. The correlation between Bitcoin, gold, and the stock market is worth close attention. Currently, the focus is on the key resistance level of $88,800. Until a clear breakthrough above this level, it is advisable to remain cautious in drawing definitive conclusions.