While Crypto Investor Sentiment has seen a major recovery from global tariff concerns, analysts warn that structural weaknesses in the market could still provide negative momentum during the weekend’s illiquidity period.
This week, the risk appeal appeared to have returned among crypto investors after President Donald Trump adopted a softer tone.
However, improved investor sentiment “doesn’t guarantee that Bitcoin will avoid volatility over the weekend,” an analyst at Bitfinex Exchange told Cointelegraph.
“An improved emotionally reduces vulnerability, but does not rule out structural risks like thin liquidity over the weekend.”
“Historically, the weekends have remained vulnerable to sharp movements, adding that unexpected macroeconomic news could still increase volatility during low liquidity periods, especially when there is high open interest and low market depth.
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Bitcoin (BTC) recovered nearly 11% over the past week, but its rally was previously limited to Sunday’s liquidity dynamics.
Bitcoin fell below $75,000 on Sunday, April 6, despite the first separation from a $3.5 trillion decline in the US stock market on April 4 after US Federal Reserve Chairman Jerome Powell warned that Trump’s tariff chair could affect the economy and raise inflation.
The correction was exacerbated by the lack of liquidity over the weekend and the fact that Bitcoin is the only large liquid asset available for licking, industry watchers told Cointelegraph.
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“While improving sentiment creates a more stable foundation, the cryptocurrency market remains susceptible to rapid movements,” says Marcin Kazmierczak, co-founder and chief sales officer of Redstone Blockchain Oracle Farm.
“The sentiment recovery provides some cushion, but traders must remain cautious as weekend liquidity constraints can continue to amplify price movements, regardless of current market mood,” he told Cointelegraph.
Crypto investors could be “maximized by tariff-related fears”
Cryptocurrency Markets may be priced across the full range of tariff-related concerns, according to Aurelie Barthere, a leading research analyst at Crypto Intelligence Platform Nansen.
“I feel like we are taking the most out of our tariff-related fear,” she told Cointelegraph, adding:
“Many people remain uncertain as to where things are heading next month or so, but the market seems to be waiting for a slight signal that we are back in the game.”
“Whether a rally is sustainable depends at least on whether it can be isolated and overcome previous levels of resistance. It appears that there is a US dollar and the US Treasury Department, as the market appears to believe that Trump has been placed under the stock.”
Nansen previously predicted a 70% chance that the crypto market will begin recovering from bottom by June, but emphasized that timing will depend on the outcome of the tariff negotiations.
Tariff negotiations could be “attack” just to get the US to reach a trade agreement with China, according to Raoul Pal, founder and CEO of Global Macro Investor.
https://www.youtube.com/watch?v=hb0z1ti8uys
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