Quick overview

Live BTC/USD Chart

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Despite Wall Street’s mixed close, the cryptocurrency market has reversed earlier losses and extended Monday’s upward momentum. Bitcoin (BTC) is up 1.4%, trading at $104,394.50, while Ethereum (ETH) leads altcoin gains with an 8.1% surge to $2,600.

The rally comes amid renewed optimism following a better-than-expected U.S. inflation report, which showed a sharper-than-forecast slowdown in price growth.

Altcoins are also trading higher, with gains of up to 8%. Ethereum leads the pack, followed by PI (+7.4%), Chainlink (+5.4%), Solana (+5%), and Hyperliquid (+4.1%).

Over $530 Million in Long Positions Liquidated

According to Coinglass, more than $530 million in long positions have been liquidated in the past 24 hours. Of that, around $200 million came from Bitcoin futures contracts and $170 million from ether-linked products. These liquidations occur when exchanges automatically close leveraged positions due to insufficient margin, forcing traders out of the market.

At the same time, open interest in crypto futures dropped by over $1.2 billion, signaling significant deleveraging as traders were pressured to unwind long positions.

From Euphoria to Caution

The early-week rally was fueled by easing trade tensions between the U.S. and China. Washington announced a temporary reduction in tariffs from 145% to 30% for 90 days, while Beijing cut its tariffs from 125% to 10% on certain U.S. goods. The breakthrough boosted global markets and spilled over into crypto assets.

Markets also reacted positively to other U.S. trade deals, including a recent agreement with the United Kingdom, which further supported Bitcoin and equity indices. However, the U.S.-China trade negotiations remain the key catalyst: if they advance, new crypto highs could follow; if not, a pullback may occur before the end of the month.

That said, improved trade relations might also dampen demand for risk assets like cryptocurrencies, as reduced geopolitical risk lessens the perceived need for hedging.

Eyes on the Fed and Inflation

Investors are now turning their attention to the upcoming Federal Reserve meeting. While markets are pricing in three to four rate cuts in 2025, the Fed has maintained a more cautious stance, signaling it needs more time to assess the impact of tariff changes before adjusting monetary policy.

All eyes are on today’s inflation data. Analysts expect April’s Consumer Price Index (CPI) to hold steady at 2.4% year-over-year, with core inflation at 2.8%. The outcome will likely influence the Fed’s tone and the next move for both crypto and broader markets.