Bitcoin Surges 15% On Tariff Relief, Then Drops 2% On Uncertainty

Bitcoin (BTC) surged past the $84,500 mark on April 14, driven in part by the announcement of partial import tariff relief by the US President. However, the optimism was short-lived as traders realized that the relief was temporary and that tariffs on the electronics supply chain could be revisited. This uncertainty, stemming from ongoing trade tensions, impacted Bitcoin markets, causing traders to lose some of their regained confidence. As a result, Bitcoin’s price failed to break above $86,000, and BTC derivatives showed limited short-term potential, setting the tone for the next few days.

The premium on Bitcoin monthly futures contracts peaked at 6.5% on April 11 but has since dropped to 5%, which is near a neutral to bearish threshold. Sellers typically require a 5% to 10% annualized premium for longer settlement periods, so anything below this range indicates reduced interest from leveraged buyers. This drop in premium suggests that the market sentiment for Bitcoin is not as bullish as it was earlier.

Traders’ brief excitement can be linked to the announcement that tariffs on imported semiconductors would be reviewed. This suggests that exemptions for smartphones and computers are not final. The performance of broader markets, particularly large technology companies reliant on global trade, appears to have influenced Bitcoin sentiment. The strong intraday correlation between Bitcoin and stock markets has dampened bullish enthusiasm, leaving open questions about whether this effect is limited to BTC futures.

To determine whether Bitcoin traders’ sentiment is merely mirroring trends in the S&P 500, it is helpful to examine the BTC options markets. If professional traders anticipate a significant price drop, the 25% delta skew indicator will rise above 6%, as put (sell) options become more expensive than call (buy) options. On April 13, the Bitcoin options delta skew briefly dipped below 0%, signaling mild optimism. However, this momentum did not hold on April 14, reinforcing data from Bitcoin futures that show no significant bullish sentiment despite prices recovering from the $74,440 lows.

Another way to gauge market sentiment is by analyzing stablecoin demand. Strong retail interest in cryptocurrencies usually pushes stablecoins to trade at a premium of 2% or more above the official US dollar rate. In contrast, a premium below 0.5% often indicates fear as traders move away from crypto markets. Between April 6 and April 11, Tether (USDT) in China traded at a 1.2% premium, reflecting moderate enthusiasm. However, this trend reversed, with the premium now at just 0.5%, suggesting that the earlier excitement has dissipated. Hence, traders remain cautious and show little confidence in Bitcoin surpassing $90,000 in the near term.

The announcement of Strategy’s $286 million Bitcoin acquisition at $82,618 failed to boost sentiment, as investors suspect that the recent temporary decoupling from stock market trends was largely driven by this purchase. Similarly, Bitcoin spot exchange-traded funds (ETFs) saw $277 million in outflows between April 9 and April 11, further weakening any potential improvement in trader confidence.