Bitcoin Back at $94,000 – Is This the Trend Reversal?

Bitcoin, Ethereum and other cryptocurrencies are soaring again. Is this the long-awaited turnaround? And what’s fueling the rally? One lead surprisingly points to the European Central Bank.

It won’t take much more for Bitcoin to bounce back over the $100,000 mark—a small push like we saw yesterday and today, and from there, it’s only a short leap to a new all-time high.

On Sunday, April 20th, Bitcoin began its climb at around $84,000, reaching a strong $94,000 today.

With this, Bitcoin has conquered a 1-month high. In the first third of April, the price plunged to below $75,000 and, after a short and weak recovery, formed a double bottom with high trading volume—a classic signal for a trend reversal. It didn’t deceive this time either, and the price has since climbed upward energetically.

The recovery becomes even more impressive when you zoom out to the 1-year chart. Here, you can clearly see that the price isn’t just holding on briefly before continuing its descent, but instead, it has enthusiastically broken through every conceivable trend line. That doesn’t prove a genuine trend reversal—but it is a strong indication.

Ethereum is also gaining momentum. In sync with Bitcoin, ETH rose from around $1,540 to about $1,800. With gains of nearly 14 percent in the past 24 hours, Ethereum’s price increase even outshines Bitcoin’s.

However, the recovery looks less impressive if you examine the 1-month chart. While Bitcoin reached a 1-month high, Ethereum is still significantly below its late-March levels.

And the 1-year chart paints an even bleaker picture. Unlike Bitcoin, there is no apparent trend reversal here—just another brief recovery that threatens to disappoint, as the previous ones did.

Things are looking a bit better for Ethereum’s competitor Solana, but we don’t want to keep harping on Ethereum’s ongoing struggles. The more interesting question today is: what has triggered this possible trend reversal in Bitcoin? And to answer that, we have some intriguing theories that lead us to the upper echelons of global finance.

When in Doubt, It’s the Interest Rates

Nothing influences the financial markets as much as the interest rate decisions of central banks. When interest rates fall, stock market legend André Kostolany once wrote, “that’s when you should jump into the markets, no ifs or buts.” Low interest rates create liquidity, which always finds its way into the financial markets and pushes prices up.

The period from 2008 to 2022 was characterized by steadily declining key interest rates, which in the end dropped close to or, in Japan’s case, even below zero. Central banks kept supplying the markets with liquidity, hoping to stimulate the economy and, by extension, inflation. Bitcoin’s explosive price run happened entirely in a world of low interest rates up to that point—something many analysts failed to appreciate.

It was only in 2022, under the pressure of Russia’s invasion of Ukraine, that inflation rose sharply, prompting central banks to significantly raise interest rates for the first time since 2008. It’s no coincidence that this period saw the golden years of stablecoins—which were able to offer strong returns simply by holding dollars in bank accounts thanks to the high interest rates.

With the interest rate reversal, Bitcoin initially entered a bear market. The fact that Bitcoin managed to break out of this bear market despite continued high interest rates is remarkable—and certainly also a consequence of interest rates plateauing by mid-2024 and then beginning to fall again. Inflation had stabilized to some extent, so central banks cautiously opened the floodgates to allow more liquidity.

Interestingly, during this phase, the European Central Bank emancipated itself from the U.S. Federal Reserve (the Fed). The ECB used to follow the Fed’s rate decisions after a brief delay. In the current phase, it not only cut rates first, but also continues to take further and more vigorous steps—while the Fed is now the one lagging behind.

Just last week, on April 17th, the ECB cut its key interest rate once more, from 2.50% down to 2.25%. The level is still higher than during the period from 2009 to 2022, but it shows a clear trend and leaves plenty of room for more cuts. Interestingly, the euro is taking the lead here, resulting in the paradoxical situation that the euro’s price in dollar is rising even though the ECB’s looser monetary policy is actually more inflationary. At $1.14, the euro has reached its highest value since the end of 2021—the end of the low-interest phase.

The strength of the euro is likely also a result of looming threats to the dollar’s status as the world’s reserve currency due to Trump’s tariff policies. At the same time, the U.S. president is pressing hard for the Fed to cut rates too. But Fed Chairman Jerome Powell is holding out for now, to which Trump responded with a furious message: “There is almost no inflation anymore, but the economy MIGHT SLOW DOWN if Mr. Too-Late, a major loser, doesn’t CUT interest rates NOW.”

Trump wants to replace Powell with a more agreeable director. The president wrote that Powell’s dismissal “can’t come SOON ENOUGH.” However, since the Fed’s charter grants it independence, Trump can’t dismiss Powell. That’s why Trump is now saying he has “no intention” of removing the Fed Chairman from office.

Regardless of this power struggle, Powell will probably have little choice but to cut rates in the coming months if inflation in the U.S. continues to cool and tariffs don’t lead to further price increases. So it’s conceivable that, over the course of this or next year, the markets could return to a low-interest-rate environment—bad for stablecoins, good for Bitcoin.

The New SEC Chair Makes Crypto a Top Priority

Less independent than the Fed is the SEC—the top financial regulator in the U.S. It had been led by Gary Gensler, a hard-nosed supervisor highly critical of cryptocurrencies. Trump has now replaced him with Paul Atkins, a lawyer and entrepreneur, who not only advocates for very loose regulation but also served as co-chair of the industry lobbying group „Chamber of Digital Commerce,“ leading the „Token Alliance“—essentially a self-regulatory body for the sector. In a way, the fox is being put in charge of the henhouse, which, for the “foxes” in the industry, is fantastic news.

“One of the top priorities of my chairmanship,” commented Atkins on his appointment, “will be to develop a clean regulatory foundation for digital assets.” Through “rational coherence and a principled approach, we’ll ensure the United States becomes the best and safest location in the world.” The market appears to be on his side—Bitcoin’s price surged further immediately after his appointment.