The mood within the crypto investors has recovered significantly from global tariffs, but analysts warn that the structural weaknesses of the market in times of illiquidity on the weekend can still result in a downside dynamics.
The risk -appetite looked as if it would return amongst crypto investors this week after US President Donald Trump had accepted a softer tone and said that the import duties for Chinese goods might be “significantly decreased”.
However, the improved investment mood “doesn’t guarantee that Bitcoin might be avoided volatility on the weekend,” analysts from Bitfinex Exchange told CoinTelegraph:
“Pent improvements reduce fragility, but they don’t eliminate structural risks like thin weekend liquidity.”
“Historically, weekends remain vulnerable to sharp movements – especially if the open interest is high and the depth of the market is low,” said the analysts and added that unexpected macroeconomic news can still increase volatility during low liquidity times.
Bitcoin (BTC) achieved a recovery of virtually 11%last week, but his rally was previously limited by the Sunday liquidity dynamics.
BTC/USD, 1-year diagram. Source: cointelegraph
Bitcoin fell under 75,000 US dollars on Sunday, April 6, although the US stock market decline on April 4 had initially decoupled after Jerome Powell, the chairman of the US Reserve, had warned that Trump's tariffs could influence the economy and increase inflation.
The correction was tightened by the shortage of weekend liquidity and the incontrovertible fact that Bitcoin was the one large liquid assets for the gap, the commercial objects said.
“While an improved mood creates a more stable basis, cryptocurrency markets in times of reduced trade volume are still at risk of quick movements,” says Marcin Kazmierczak, co -founder and chief operating officer from Redstone Blockchain Oracle company.
“The restoration of mood provides some upholstery, but retailers should remain careful since the liquidity restrictions can increase the value movements whatever the current market mood on the weekend,” he told CoinTelegraph.
Crypto investors can have “maximum fear of customs -related fears”,
According to the Aurelie Barthere, important analyst of the Crypto Intelligence platform Nansen, cryptocurrency markets have the complete scope of the tariff concerns in reference to tariffs.
“It appears like now we have equipped the fear in reference to tariffs in reference to the tariff,” she said to CoinTelegraph and added:
“While many aren’t sure where things go over the following month or something, it also seems as if the markets are only waiting for the slightest signal that we’re back in the sport.”
“Whether the rally is sustainable is determined by whether we will break through previous levels of resistance, a minimum of in isolation. It could have legs since the markets now imagine that there’s a” Trump “under stocks, the US dollar and US -bond,” added to more potential more potential fighterness within the upcoming negotiations.
Nansen previously predicted a 70% likelihood that the crypto markets will start a recovery by June, but emphasized that the timing is determined by the results of the tariff negotiations.
According to Raoul Pal, founder and CEO of Global Makro Investor, the collective bargaining can only be a trade agreement with China for compliance with the USA.
