Bitcoin's Surge to $83.5K: Is It a Sign of Market Recovery or Just a Temporary Rally?

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Bitcoin price has recorded a strong surge to $83,500, marking a significant recovery amid the volatile cryptocurrency market. However, despite the strong performance of U.S. stocks, Bitcoin’s derivative metrics have yet to show bullish momentum, reflecting cautious sentiment among traders. Key factors such as the volatility of U.S. Treasury yields and U.S. President Donald Trump’s tariff pause are impacting Bitcoin’s price movements.

Bitcoin Price Surge Amid U.S. Market Shift

On April 9, BTC surged by 5% in less than an hour, surpassing the $83,000 mark, which was last seen on April 6. This increase was driven by U.S. President Donald Trump’s announcement of a 90-day pause on tariffs, except for China. The recovery in U.S. equities and the tariff pause fueled temporary optimism among crypto investors, pushing Bitcoin’s price past the $83,500 level.

However, Bitcoin’s derivative indicators, such as the futures premium, failed to maintain upward momentum. The BTC futures premium briefly rose above the neutral 5% threshold but could not sustain its strength, signaling a lack of long-term confidence. Traders remain skeptical about whether the U.S. Federal Reserve will cut interest rates throughout the year, which affects investor sentiment.

Why Are Traders Cautious Amid Uncertainty in U.S. Treasury Yields?

One of the key factors contributing to traders’ caution is the volatility of the U.S. 10-year Treasury yields. On April 9, these yields dropped significantly, reflecting reduced confidence in the U.S. government’s ability to manage its growing debt. The decline in yields signals concerns about stagflation, a major economic threat to financial markets.

According to data from the CME FEDWatch Tool, the probability of the Fed reducing interest rates below 4% by September 17 dropped from 97.6% on April 8 to 69.7% on April 9. This reflects increasing doubts among traders about the U.S. monetary policy. As Treasury yields decrease, investors fear that foreign investors will continue to reduce their holdings of U.S. Treasuries, which impacts the global market.

Additionally, Bitcoin options market signals caution:

• 25% delta skew (put-call) indicator reached 12% on April 9 after China raised tariffs
• Quickly reversed to a neutral 3% following Trump's tariff pause announcement
• Indicates options markets now pricing equal probabilities for upward and downward price movements

This shift shows that options markets are now pricing equal probabilities for upward and downward price movements, marking the end of a bearish phase that began on March 29.

Final Thoughts

While Bitcoin price surged to $83,500, the macroeconomic factors and the volatility of U.S. Treasury yields keep Bitcoin traders cautious. The uncertainty regarding U.S. monetary policy and concerns over stagflation continue to affect investor sentiment. Although there has been a temporary recovery, for Bitcoin to sustain its upward momentum, there needs to be greater macroeconomic stability and confidence in the U.S. government’s ability to manage its debt. The market will continue to monitor signals from the Fed and global economic conditions before making long-term investment decisions.

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