Main Points:
- Elevated Bitcoin Price: BTC hovers around $93,500 amid varied macro drivers.
- Global Liquidity Boost: Quantitative easing in China, expected rate cuts in Europe and the U.S. underpin risk assets.
- Gold’s Performance and RSI Overheating: Gold’s outperformance and historical RSI peaks signal potential BTC upside.
- Extreme ETH/BTC Divergence: Ethereum’s undervaluation against Bitcoin suggests a ripe altcoin rally.
- CNH-ETH/BTC Correlation: Historical yuan strength cycles coincided with major altcoin booms.
- “China Money” Flight to Alternatives: Trade tensions drive capital from U.S. Treasuries into gold and Bitcoin.
- Institutional Adoption Trends: BlackRock and corporate treasury forecasts underline Bitcoin’s low correlation with equities.
- Digital Gold Narrative: Bitcoin’s scarcity and inflation-hedge appeal reinforce its “digital gold” status.
- Geopolitical Reserve Shifts: Central banks in China, Russia boosting gold reserves point to de-dollarization trends.
- IMF Growth Downgrade: New tariffs risk slowing global GDP, enhancing demand for non-sovereign assets.
Elevated Bitcoin Price Anchored by Macro Tailwinds
As of April 28, 2025, Bitcoin (BTC) trades near $93,496, down slightly (–0.91%) from the prior day’s close. Despite minor pullbacks, the cryptocurrency remains firmly above the $93,000 mark, demonstrating robust support amid choppy global markets. This resilience is largely attributed to significant injections of liquidity from major central banks and rising institutional interest in digital assets as portfolio diversifiers.
Global Liquidity Surge: QE in China and Rate Cut Expectations
Analyst Michael van de Poppe highlights that expanding liquidity—driven by China’s surprising quantitative easing measures, dovish signals from the European Central Bank, and the U.S. Federal Reserve’s ongoing rate-cut prospects—is a primary catalyst for Bitcoin’s strength. The influx of easy money bolsters demand for scarce assets like Bitcoin, prompting investors to seek yields beyond traditional fixed income products.
- China QE: Beijing’s liquidity operations in March and April totaled over RMB1 trillion, aimed at shoring up growth amid sluggish industrial output.
- ECB Dovish Outlook: Following weak Eurozone inflation data in early April, markets have priced in a 25 bps cut by the ECB in June.
- Fed Rate Cuts: U.S. Fed futures imply the first Fed rate reduction could occur as early as Q3 2025, further easing global financial conditions.
This macro backdrop resembles the 2020–21 pre-halving cycle, suggesting Bitcoin may challenge its all-time high near $70,000 later this year.
Gold’s Outperformance and Overheated RSI
Gold has outpaced the S&P 500 by roughly 20% since 2022, driven by safe-haven buying and persistent inflation concerns. Its Relative Strength Index (RSI) recently spiked above 80—a level unseen since 1980—indicating overbought conditions but also underscoring robust momentum. Historically, such RSI extremes in gold have preceded surges in Bitcoin by 3–5 months, as investors turn from physical metals to digital alternatives.
Ethereum’s Undervaluation Signals Altcoin Opportunity
Ethereum’s ETH/BTC ratio has dipped to lows not observed since 2016, reflecting relative underperformance versus Bitcoin. Van de Poppe argues that this extreme divergence historically marks the beginning of 12–18-month altcoin rallies. Should ETH regain even half of its typical premia versus Bitcoin, a significant capital rotation into the broader altcoin market could follow.
Yuan-Dollar and ETH/BTC Historical Correlations
A striking pattern emerges when overlaying the CNH/USD exchange rate with the ETH/BTC ratio. In December 2016 and summer 2019—periods when the offshore yuan found a bottom—Ethereum and the wider altcoin sector experienced explosive rallies. These precedents suggest that a stabilized or strengthening yuan, fueled by Chinese monetary easing, may catalyze renewed altcoin demand globally.
“China Money” Flight: From U.S. Treasuries to Alternative Assets
Heightened Sino-U.S. trade tensions have prompted significant shifts in Chinese capital allocation. Data from the People’s Bank of China reveal a modest reduction in U.S. Treasury holdings in Q1 2025, with much of that liquidity redirected into gold and Bitcoin. As geopolitical risks mount, “China money” serves as a bellwether for global alternative-asset flows.
Institutional Adoption and Low Equity Correlation
On April 25, BlackRock’s Head of Thematic and Active ETFs, Jay Jacobs, told CNBC that while Bitcoin’s correlation with traditional equities remains elevated in the short term, the longer-term relationship is minimal. He asserted that Bitcoin’s unique risk-return profile makes it an ideal diversifier for institutional portfolios seeking uncorrelated returns.
Reinforcing the “Digital Gold” Narrative
Bitcoin’s fixed supply cap of 21 million coins and decentralized issuance underpin its “digital gold” thesis. With gold prices surging past $3,000 per ounce, Bitcoin’s market capitalization—though smaller—offers similar scarcity dynamics. Joe Consoli, Growth Director at Theya, notes that historically, Bitcoin has tended to surpass its previous highs within 100–150 days after gold records new all-time peaks.
Geopolitical Reserve Diversification by Central Banks
Central banks in China, Russia, and other emerging economies have incrementally raised their gold reserve ratios over the past five years. This strategy aims to reduce dependence on U.S. dollar assets—a trend accelerated by recent tariff policies from the U.S. administration. Such moves reflect a broader de-dollarization effort, indirectly validating Bitcoin as a non-sovereign hedge.
IMF’s Global Growth Downgrade Amplifies Risk-Off Appeal
In its April 2025 World Economic Outlook, the IMF forecasted a 0.5 percentage-point downgrade to global GDP growth for 2025, citing U.S. tariff escalations. The fund warned that reallocation of resources toward less competitive industries and higher production costs could dampen productivity and innovation. In this environment of heightened uncertainty, alternative assets like Bitcoin stand to attract incremental demand.
Bitcoin’s sustained strength near $93,500 is not happenstance but the product of converging macroeconomic forces: unprecedented liquidity injections, gold’s bullish momentum, institutional portfolio diversification, and geopolitical reserve shifts. While Ethereum’s current undervaluation hints at forthcoming altcoin rallies, Bitcoin’s “digital gold” status remains the bedrock of its appeal. Looking ahead, as central banks and sovereign wealth funds further diversify away from fiat assets, Bitcoin is poised to play an increasingly pivotal role in global reserve management and investor portfolios.
