Crypto platform data:

 

  • We are seeing more buying since Liberation Day compared with March: the average number of long crypto positions opened per day from 3 April onwards is 19% higher than the average number opened per day in March
  • But this is down year-on-year compared to the average number opened per day in April 2024, although this is not surprising given last year’s rally and volatility.
  • Buying activity was especially elevated on 7 April, as the number of long crypto positions opened was 153% higher than the average number opened per day in March.
  • BTC, ETH and SOL are among the most traded assets, and users are buying more than they are selling them.

 

How have crypto and crypto investors reacted to US tariffs?

 

Simon Peters, crypto analyst at eToro said: “Crypto markets have been holding up relatively well post ‘Liberation Day’. Historically crypto markets have been susceptible to big drawdowns in uncertain conditions. For example, during Covid, the total market capitalisation dropped nearly 50% in a week, so an 11% decline at its lowest since ‘Liberation Day’ on 2nd April is fairly modest in my opinion.

“With bitcoin specifically, since reaching an all-time high of $109,350 on 20th January, the price is down 25%, currently trading at $81,600. 25% drawdowns are not unusual to see in bitcoin or crypto bull markets. To be honest they are somewhat expected. Seasoned crypto investors are looking at this as an opportunity to add further to their holdings.

“On eToro, we are seeing more buying since Liberation Day compared with March, especially on 7 April. As well as bitcoin, ethereum and solana are among the most traded assets, and users are buying more than they are selling them.

“We will wait to see if the bottom is in, but as the dust starts to settle around tariffs, and if financial conditions start to loosen (US dollar weakening, bond yields coming down, Federal Reserve cutting interest rates, increased liquidity in financial markets due to government debt refinancing), this could lead the way for the next upwards move and fresh all-time highs – and it seems this is what the retail investor is banking on.

“From a technical perspective, the bitcoin price has also come down to the 50 week exponential moving average, where it previously found support after the 5th August dip, when the Bank of Japan raised interest rates and the yen carry trade unwound. From here the price then rallied 120% to the current $109,350 all-time high. Not to say we’ll see the same again, but it gives some confidence that we could be at, or very close to, a bottom.”