On Monday (April 28), Bitcoin fell to $93,000, facing the risk of bears attempting to take control. Over the weekend, U.S. President Trump 'poisoned' the atmosphere, emphasizing that the possibility of pausing taxes again is small, stressing that this is a windfall for the U.S., and stating that federal income tax will be significantly reduced. Despite the renewed tensions of the tariff war, Wall Street's biggest whale, Strategy Company, has once again issued a signal to increase holdings, potentially disclosing increased holdings data this week.
Trump stated that the possibility of pausing tariffs again is small.
Trump pointed out that once the proposed trade tariffs are fully implemented, federal income tax will be 'significantly reduced' or completely eliminated. He noted that the accompanying tax cuts would primarily target individuals earning less than $200,000 a year.
Trump disclosed for the first time on Truth Social the specific details of the proposed plan since he and his cabinet members began promoting comprehensive tax reform in October 2024. He wrote, 'This will be a windfall for America, and the IRS is taking action.'
Trump previously proposed eliminating the federal income tax levied 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 growth of disposable income should partially flow back into productive investments. However, this stimulative 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 of the 19th century when there was no permanent federal income tax.
A study conducted by accounting automation company Dancing Numbers found that Trump's proposal could save Americans an average of $134,809 in taxes over their lifetime.
Dancing Numbers adds that if other wage-based income taxes are also eliminated, each American could save up to $325,561 in taxes.
Michael Saylor, founder of Strategy Company (formerly MicroStrategy), again released information related to Bitcoin Tracker, stating: 'Stay humble, stack Sats.'
According to previous patterns, Strategy Company always discloses increased Bitcoin holdings the day after related news is released.
Bitcoin Technical Analysis: Will it soon return to the $100,000 target?
Between April 20 and 26, Bitcoin's price rose by 11% and remained near a two-month high of $94,000, showing resilience. This rebound came after the Trump administration signaled a reduction in import tariffs and following strong corporate earnings reports.
Within 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 doubts about whether the $100,000 target is still realistic.
Perpetual Bitcoin futures contracts are favored by retail investors as their prices are closely related to the spot market prices. A positive funding rate means buyers need to pay fees to maintain their positions, so a reversal of this rate is usually associated with a bearish trend.
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 fluctuating, but as Bitcoin's price climbed above $94,000, sellers were caught off guard. Since April 21, over $450 million in Bitcoin short positions have been liquidated.
The recovery of market confidence and Bitcoin's strong price increase can be partly attributed to the S&P 500's 7.1% rise this week. However, despite market optimism, Trump's comments on the tariff war have led traders to question the sustainability of the recent rally.
The first quarter earnings reports currently being released by companies differ from those prior to the escalation of the trade war, leading to different factors driving the stock market and Bitcoin's movements. 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 index and Bitcoin is 29%, far below the 60% observed from March to mid-April. Although this lower correlation does not imply complete decoupling, as investor sentiment remains 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 holds above $90,000, the stronger investor confidence becomes, potentially paving the way for further increases. The rising 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 anticipate their leverage costs.
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 bearish territory.
The disconnection in leverage demand between perpetual futures and monthly Bitcoin contracts is not uncommon. Even if retail traders remain cautious, large increases in institutional holdings alone could push Bitcoin prices above $100,000 in the near future.
