4 reasons the price of Bitcoin could rise to $90,000 in April

Bitcoin traders are somewhat confused by the price of BTC soaring to 85,000 dollars, especially as the S&P 500 index has fallen by 5.7% in April and this bullish move comes after BTC recovered 14% from the drop caused by the trade war, reaching 74,400 dollars. Investors are cautiously optimistic, but there are many events and data indicating that the price may continue to rise above the 90,000 dollar threshold.

Many indicators and events support the possibility of "decoupling" – that is, the price of Bitcoin no longer closely follows traditional financial instruments. However, some doubts arise as the price of BTC has yet to catch up with the rise of gold. The price of gold reached a record high of $3,358 on April 16, raising speculation that governments and central banks are increasing their gold reserves.

Global economic stimulus increases as the United States shows signs of weakening

As central banks respond to the risk of economic recession, the money supply is likely to continue to increase. While the Federal Reserve of the United States (Fed) has not yet lowered interest rates or expanded its balance sheet, other countries have begun to implement such measures. This adds further pressure on the U.S. economy, which is starting to show signs of weakness.

The total assets of the Fed (million USD) | Source: St Louis FedIn China, new bank loans in March bounced back stronger than expected, reaching 500 billion dollars – over 20% higher than analysts' forecasts and a clear recovery compared to the decline of the previous month. According to Reuters, the People's Bank of China (PBOC) has committed to strengthening stimulus measures to mitigate the impact of the trade war with the United States.

On April 17, the European Central Bank (ECB) cut interest rates for the seventh time in a year in a bid to support the eurozone economy. The ECB has lowered its cost of capital to its lowest level since late 2022. Some investment banks have also lowered their inflation forecasts for the region, as the tariff war could cause the region's gross domestic product (GDP) to fall by 0.5%.

The Weakening of the US Dollar and the Long-Term Commitment of Bitcoin Miners

Moreover, the pressure on the Fed to end its tightening monetary policy is increasing as the US dollar weakens against other major currencies in the world. Indeed, the DXY index has fallen to its lowest level in three years. A weak dollar often benefits exports, helping to improve the current account balance, but this positive impact is unlikely to be sustained in the context of the ongoing trade war.

The US Dollar Index (DXY) | Source: TradingViewInvestor confidence is also affected by President Donald Trump's public criticism of Fed Chairman Jerome Powell. This situation makes it more difficult for the US Treasury to rely on issuing government bonds to maintain finances, further weakening the US Dollar. President Trump even stated that Powell's dismissal "is not happening fast enough," while calling for interest rate cuts.

However, considering the current macroeconomic data, there is almost no reason to support the Fed easing monetary policy, especially after the latest report on jobless claims in the United States released on April 17. According to the Labor Department, initial claims fell by 9,000 to 215,000 in the week ending April 12. Chairman Powell also stressed on April 16 that the labor market is still in "solid shape."

The average estimated hashrate over the last 7 days of Bitcoin | Source: Blockchain.comBitcoin miners have also shown a strong long-term commitment, as the hashrate* increased by 8% compared to last month. Since the Bitcoin halving event in April 2024, traders have been concerned that decreased profits will lead many miners to abandon mining, which could result in a sell-off, as miners hold nearly 1.8 million BTC according to Glassnode's report.

*Hashrate is a unit of measurement for the computational power of a blockchain network or another distributed computing network. It measures the number of cryptographic calculations that the network can perform per second. The commonly used unit of measurement is "hashes per second" (H/s) or larger units such as kilohash (KH/s), megahash (MH/s), gigahash (GH/s), terahash (TH/s), and petahash (PH/s). Hashrate is often used to measure the strength of Proof of Work blockchain networks such as Bitcoin.

Disclaimer: This article is for informational purposes only and is not investment advice. Investors should do their own research before making any decisions. We are not responsible for your investment decisions.

Dinh Dinh