On Monday (April 28), Bitcoin fell to $93,000, facing risks of short sellers attempting to seize control. U.S. President Trump 'poisoned' over the weekend, emphasizing that the possibility of suspending tariffs again is low, stressing that this is a windfall for the U.S., and claiming that federal income tax will be significantly reduced. Despite the renewed tensions in the tariff war, Wall Street's largest whale, Strategy, issued a signal to increase holdings again, possibly disclosing the increase in holdings data this week.
Trump stated that the possibility of suspending tariffs again is low.
Trump pointed out that once the proposed trade tariffs take full effect, federal income tax will be 'significantly reduced' or completely eliminated. He noted that the accompanying tax cuts will primarily target individuals with an annual income below $200,000.
In a post on Truth Social, Trump revealed for the first time specific details of the proposed plan since he and his cabinet members began advocating for comprehensive tax reform in October 2024. He wrote: 'This will be a windfall for America, and the IRS is taking action.'
Trump previously proposed the idea of eliminating the federal income tax collected by the IRS and replacing income tax revenue with tariffs on imported goods.
Eliminating federal income tax could have a positive catalytic effect on asset prices, including cryptocurrencies, as the increase in disposable income should partially flow back into productive investments. However, this stimulus effect is not guaranteed.
Trump stated that replacing federal income tax with revenue from import tariffs would restore the prosperity of America's Gilded Age in the 19th century when there was no permanent federal income tax.
Research conducted by accounting automation company Dancing Numbers found that Trump's proposal could save Americans an average of $134,809 in taxes over a lifetime.
Dancing Numbers added that if other wage-based income taxes are eliminated simultaneously, the tax savings per American could be as high as $325,561.
Michael Saylor, founder of Strategy (formerly MicroStrategy), once again released information related to Bitcoin Tracker, stating: 'Stay humble, stack Sats.'
According to previous patterns, Strategy typically discloses increased Bitcoin holdings information the day after relevant news is released.
Bitcoin Technical Analysis: Will it soon return to the $100,000 target?
From April 20 to 26, Bitcoin prices rose by 11% and remained near the two-month high of $94,000, demonstrating resilience. This rebound occurred after the Trump administration signaled a reduction in import tariffs and following strong corporate earnings reports.
In just five days, net inflows into Bitcoin spot ETFs reached a record $3.1 billion, further boosting investor confidence in Bitcoin. However, a key Bitcoin derivatives indicator shows bearish momentum, raising questions about whether the $100,000 target remains realistic.
Perpetual Bitcoin futures contracts are favored by retail traders because their prices closely align with spot market prices. A positive funding rate means buyers need to pay fees to maintain their positions, so a reversal of this rate is often associated with bearish trends.
The significant negative financing rate recorded on April 26 is extremely unusual during a bull market, as it indicates strong seller demand. Since April 14, this indicator has been volatile, but as Bitcoin prices climbed above $94,000, sellers were caught off guard. More than $450 million in Bitcoin short positions have been liquidated since April 21.
The recovery of market confidence and the strong rise in Bitcoin prices can be partly attributed to the S&P 500's 7.1% increase this week. However, despite market optimism, Trump's comments on the tariff war led traders to question the sustainability of the recent rally.
The first-quarter earnings reports released by companies now differ from those before the escalation of the trade war, leading to different factors driving the stock market and Bitcoin trends. In fact, Bitcoin's price is no longer closely correlated with the S&P 500 index.
Currently, the 30-day correlation between the S&P 500 and Bitcoin is 29%, well below the 60% correlation from mid-March to mid-April. Although this lower correlation does not imply a complete decoupling, as investor sentiment is still influenced by macroeconomic factors, it does indicate that Bitcoin is not merely an alternative to tech stocks.
Gold failed to maintain its bullish momentum after reaching a historic high of $3,500 on April 22, which is also seen as a significant blow to Bitcoin's status as an independent asset class.
Some traders have questioned the claim of 'digital gold,' but the longer Bitcoin stays above $90,000, the stronger investors' confidence becomes, potentially paving the way for further rises. The increase in demand for bearish leverage in perpetual Bitcoin futures does not align with the sentiment of professional traders. Monthly Bitcoin futures contracts avoid the volatility of funding rates, allowing traders to know their leverage costs in advance.
On April 26, the two-month Bitcoin futures premium (basis) rose to its highest level in seven weeks, indicating increased interest in bullish positions. This indicator is currently at 6.5%, still within the neutral range of 5% to 10%, but moving away from the bearish zone.
It is not uncommon for the demand for leverage in perpetual futures and monthly Bitcoin contracts to be out of sync. Even if retail traders remain cautious, a significant accumulation by institutions could be enough to push Bitcoin prices above $100,000 in the near future.
