According to Tim Sun, senior researcher at HashKey Group, there are two reasons for this bullish leg.
“A temporary easing of geopolitical conflicts, which spurred a marginal recovery in global risk appetite and a substantive improvement in the liquidity environment,” Sun told Decrypt.
Sun further explained that the significant rebound in net market liquidity noted since early April also helped improve risk appetite, specifically for traditional risk assets like the S&P 500 and Bitcoin.
“Consequently, the combination of recovering risk appetite and warming liquidity pushed Bitcoin rapidly above $75,000,” he said.
Downside risks remainExperts remain skeptical that a sustained uptrend will emerge from this.
“It’s important to keep the broader context in mind,” Georgii Verbitskii, derivatives trader and founder of TYMIO, told Decrypt. “The market still looks weak and unstable, more consistent with a bearish or transitional phase than a strong uptrend.”
He added that investor expectations for large, sustained moves “should remain low,” and investor sentiment should remain “cautious.”
Other downside risks that could undo Bitcoin’s push to $75,000 include the U.S. tax season, typically running from mid-to-late April. This period could include portfolio rebalancing and keep the upside capped.
“Based on the Treasury’s financing and cash management rhythm, the Treasury General Account’s balance is likely to return to over $1 trillion. This implies that the Treasury will once again withdraw liquidity from the market system, potentially suppressing high-elasticity risk assets like Bitcoin.” Sun explained.
If the $73,000 to $75,000 range holds, and downside risks do not multiply, Sun highlights $79,000 as the next key level to watch.
