Crypto Sentiment Improves 20% as Trump Eases Tariff Stance

Cryptocurrency investor sentiment has shown a marked improvement this week, largely due to a more moderate stance from U.S. President Trump on import tariffs with China. This shift has led to a reduction in global tariff concerns, thereby boosting the risk appetite of investors in the crypto market. However, analysts remain cautious about the potential downside risks that could arise due to structural weaknesses in the market, particularly during weekends when liquidity is typically lower.

A Bitfinex analyst highlighted that the improved sentiment does not necessarily insulate Bitcoin from volatility over the weekend. While better sentiment can mitigate market fragility, it does not eliminate inherent risks such as low liquidity during weekends. Historically, weekends have been prone to sharp fluctuations, especially when there is high open interest and low market depth. The analyst warned that sudden macroeconomic news could exacerbate volatility during these periods of low liquidity, posing a significant risk to the market.

According to the analyst, the structural risks in the crypto market, such as low weekend liquidity, remain a concern. These risks can lead to sudden and sharp price movements, which could catch investors off guard. The analyst advised investors to remain cautious and prepared for potential downside risks, despite the current warming sentiment in the market. The analyst's warning underscores the importance of being vigilant and aware of the market's structural weaknesses, even during periods of improved sentiment.