Bitcoin rallies above $90,000 to extend rebound to more than 20%

23/04/2025 06:00 AST

Bitcoin advanced above $90,000 for the first time since early March, fueling optimism that the biggest digital token is finally breaking free of a longstanding tendency to move in the same direction as US tech stocks.

After briefly succumbing to the risk-asset selloff that followed US President Donald Trump's announcement of sweeping tariffs on geopolitical allies and rivals alike, Bitcoin has rallied almost 23 per cent from an April 7 low. In doing so, it has begun trading more akin to gold, the standout asset in markets roiled by tariff uncertainty.

Bitcoin gained as much as 5 per cent to trade as high as $91,687 on Tuesday. The Bloomberg Dollar Spot Index recovered slightly after falling to its lowest since late 2023 on Monday. The Nasdaq 100 Index was poised for a rebound after Monday's rout, yet remained well below its levels in late February and early March.

The decoupling from US risk assets - in large part driven by a slumping dollar - offers some relief for crypto bulls after Trump's first three months in power failed to ignite the rally many had expected. Even after April's gains, Bitcoin trades about 16 per cent below the record of more than $109,000 it reached on the day Trump returned to the White House in January.

"One of the possible ramifications of the US decoupling is a revisit to the long-term Bitcoin bull case as a store of value," said Augustine Fan, a partner at crypto trading platform SignalPlus. "We've been critiquing Bitcoin as a leveraged Nasdaq proxy over the past year, but it has finally started to show some signs of decoupling."

Trump's attacks in the past week on Federal Reserve Chair Jerome Powell, whom he blames for being too slow to cut interest rates, have further unnerved investors and fueled the narrative that the era of US "exceptionalism" that drove a roaring stock market is over.

That criticism, coupled with hopes for more clarity on Trump's Strategic Bitcoin Reserve plan in the coming weeks, have been among the major catalysts for the rebound in crypto assets. Trump signed an executive in early March calling for the creation of the Bitcoin reserve and a separate strategic stockpile of other tokens, asking for the Treasury secretary to deliver an evaluation of the legal and investment considerations for the plan in 60 days.

"The 60-day deadline of Trump's EO for the SBR is less than two weeks away, and any chatter related to questioning of Fed independence are having positive spill-over effects on BTC," said Vetle Lunde, head of research at crypto trading platform K33.

Both Bitcoin futures and options markets have seen renewed demand for long positions. In one bullish sign, Bitcoin basis - which is the difference between spot and futures prices - has climbed to a three-month high on CME, accompanied by moderately increasing open interest. Liquidations of bearish crypto bets have increased in the past 24 hours, according to data complied by Coinglass.

"We see early and healthy indications of willingness to add long exposure again in the market," Lunde said.

Perps signal
Still, the offshore market for perpetual futures is sending a different signal. So-called perps have been one of the most popular options for investors outside the US to bet on crypto assets. The contracts have no expiration dates and provide cash flows in the form of funding rate payments. A negative funding rate indicates bearish sentiment predominates.

"Open interest has ballooned over the past few days. Notional open interest has spiked 8.4% in the past 36 hours with funding rates hovering in negative terrain, indicative of slight short aggression," Lunde said.

However, a reversal of heavy downsize protection has emerged in the Bitcoin options market.

"Our derivatives desk has seen an uptick in volumes as sentiment shifted from downside hedging to call buying on the break above 90k in spot." said Ravi Doshi, co-head of markets at crypto prime broker FalconX.

Still, caution remains: The open interest for puts conveying the right to sell Bitcoin around $70,000 remains elevated across shorter tenors, according to crypto derivatives exchange Deribit.

The latest leg up in Bitcoin corresponds with more gains in gold, with the precious metal reaching $3,500 an ounce for the first time on Tuesday before reversing gains.

"If Bitcoin continues to trade more like gold than a tech stock, the decoupling narrative will gather momentum," said Richard Galvin, co-founder of Sydney-based crypto hedge fund DACM.

In another sign of a shift in sentiment, US-listed Bitcoin ETFs took in a combined $381 million on Monday, the biggest influx since Jan. 30. A sustained move above $88,800 for Bitcoin could propel further gains to the $92,000-$94,000 range, according to Riya Sehgal, a research analyst at Delta Exchange.

Bloomberg