Trump Truce Ignites Crypto Surge

GM Anon!

This week’s been a rollercoaster — and it’s not over yet.

From surprise inflation data and tariff-driven market chaos to a historic Bitcoin bounce and signs of life in key altcoins, we’ve got a lot to unpack. Today’s letter will dive into the macro triggers shaking the global system, how crypto is responding, and what to watch as we head into the weekend. Whether you’re trading the volatility or just trying to make sense of it all, this update should help you get your bearings.

Let’s break it down.

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TLDR

• Tariffs spike tensions: U.S.–China trade war escalates with 145% U.S. tariffs and 125% Chinese retaliation.

• Markets rattled: Nasdaq -25%, S&P -20%, bonds sell off alongside equities.

• Inflation cools: CPI -0.1% MoM, core CPI 2.8% YoY vs 3.0% expected—opens door for Fed cuts.

• Relief rally hits: Trump pauses tariffs (except China); stocks and crypto bounce hard.

• Bitcoin back above $82K after sharp dip to $74.5K.

• Gold surges to ATHs on safe-haven demand.

• ETH short ETF is top U.S. performer YTD—risk sentiment still shaky.

• Ethereum leads inflows with $159M net gain; Base and Sonic follow.

• Stablecoin caps rise on Sui (+23%) and Sonic (+28%).

• Smart money cautious—Spark sees +69% TVL but bots and meme activity cool off.

Market Analysis

Escalation of U.S.–China Trade Tensions

This week witnessed a significant escalation in the ongoing trade dispute between the United States and China. On April 9, President Trump announced a substantial increase in tariffs on Chinese imports, raising the total to 145%. 

In a swift response, China declared it would elevate tariffs on U.S. goods from 84% to 125%, effective April 12. China's Ministry of Finance criticized the U.S. actions as economically detrimental and signaled a halt to further reciprocal tariff increases, suggesting that U.S. products have become uncompetitive in the Chinese market.

These tit-for-tat measures have heightened concerns about global economic stability. The steep tariffs threaten to disrupt supply chains, increase costs for consumers and businesses, and dampen international trade. 

Analysts warn that the escalating trade war could spur inflation and potentially lead to a recession in the U.S., with industries like agriculture, food, aerospace, and semiconductors facing severe financial repercussions due to reduced competitiveness and retaliatory Chinese tariffs.

Market Reversal and the Fed’s Dilemma

The U.S.–China tariff standoff didn’t just spark geopolitical headlines — it triggered one of the most violent bouts of market volatility in recent memory. Early in the week, investor sentiment unraveled rapidly. Equities were hammered, with the Nasdaq down as much as 25% and the S&P 500 shedding over 20%.

Even more concerning was the simultaneous selloff in U.S. long bonds, a rare signal that capital was fleeing both risk and supposed safety. This kind of breakdown in traditional correlations usually points to deeper systemic stress.

Amid the panic, inflation data quietly dropped — and should have been the headline. The March CPI came in well below expectations: core CPI fell to 2.8% year-over-year (vs. 3.0% forecast), while headline CPI printed at -0.1% month-over-month, marking a rare deflationary surprise. 

For a market bracing for tariff-driven inflation, this was a sharp pivot. It instantly shifted the market’s view on the Fed’s trajectory. Talk of further rate hikes has now all but evaporated, and odds of a cut later this year have risen.

But that soft CPI print didn’t stop the bleeding — not initially. It took a policy shift to stabilize sentiment. When Trump announced a 90-day pause on reciprocal tariffs (excluding China), markets exploded higher. 

The Dow jumped nearly 2,900 points, the S&P 500 gained 9.5%, and Treasury yields fell back to 4.3% from 4.51%. It was one of the fastest relief rallies in years — but it didn’t resolve anything. It simply highlighted how fragile the current regime is: deeply reactive, headline-driven, and running on nerves.

This isn’t a return to stability. It’s a pause under pressure.

Gold Surges to All-Time Highs

In response to the escalating trade tensions and market volatility, investors have turned to gold as a safe-haven asset. On April 11, gold prices soared to record levels, with spot gold reaching an intraday high of over $3,248 per troy ounce. This development marks the second consecutive day of record-setting prices, driven by investors seeking refuge amid ongoing market uncertainty.

The surge in gold prices is attributed to several factors, including the weakening U.S. dollar, increased demand from central banks, and concerns over inflation and economic stability. 

Notably, the People's Bank of China has been purchasing gold for five consecutive months, and regulatory changes have allowed insurance funds to invest in gold, further boosting demand. Analysts suggest that the current rally in gold prices is more sustainable than previous spikes, driven by mounting geopolitical and economic uncertainties.

Bitcoin Reclaims Its Narrative Amid Global Instability

In the midst of traditional financial market chaos, the cryptocurrency sector has once again demonstrated its unique positioning. While equity and bond markets were whipsawed by the escalating tariff war and sudden inflation surprises, crypto assets showed both volatility and resilience — with Bitcoin, in particular, reasserting its status as a macro hedge and alternative to fiat monetary systems.

Earlier this week, Bitcoin briefly fell to intraday lows near $74,500 as global markets sold off in reaction to the U.S.–China tariff escalations. The move lower was largely a reflection of broad-based risk-off sentiment. 

When volatility spikes across asset classes, even structurally bullish assets like BTC are not immune to temporary drawdowns, especially when traders seek liquidity in moments of panic. But what happened next is telling.

Following President Trump’s surprise announcement of a 90-day pause on new reciprocal tariffs (excluding China), risk sentiment reversed sharply, and Bitcoin was one of the biggest beneficiaries. 

It surged past the $82,000 mark, a powerful move that not only recaptured recent losses but also pushed the asset back near its all-time highs. This rebound was not merely a technical retracement — it was a clear narrative signal: markets are beginning to treat Bitcoin less as a speculative asset and more as a structurally important macro instrument.

This price action is increasingly reinforcing Bitcoin’s long-standing thesis — that it serves as a hedge against fiat debasement, monetary policy uncertainty, and geopolitical instability. 

More importantly, the environment we are now entering — marked by potential stagflation, deteriorating U.S. fiscal credibility, and central bank hesitation — is likely to further fuel the long-term crypto narrative. 

If inflation continues to surprise to the downside, it gives the Federal Reserve breathing room to ease policy or delay further tightening. This, in turn, creates a more favorable backdrop for risk assets. But if inflation re-accelerates due to trade disruptions and supply-side shocks, it could reduce the real yield on cash and bonds — again strengthening the case for Bitcoin as a non-sovereign hedge.

In short, crypto is no longer the fringe. It's becoming a macro signal — and this week, it spoke loud and clear.

What to Watch Going Forward

As crypto continues to react to macro catalysts, there are several key areas that deserve close attention in the weeks ahead:

• Federal Reserve Policy – With inflation cooling faster than expected, the Fed may have more flexibility to pause or even pivot. Any hint of dovish policy—especially in the face of weakening data—could reshape the risk landscape quickly.

• U.S.–China Trade Negotiations – The tariff truce may have calmed markets temporarily, but the underlying tensions remain unresolved. Any escalation or breakthrough in talks could directly impact global supply chains and investor sentiment.

• Market Volatility – Geopolitical uncertainty, shifting interest rate expectations, and incoming economic data will continue to drive volatility across asset classes. Crypto is likely to remain highly responsive to these swings, particularly as it becomes more intertwined with broader macro narratives.

Staying ahead of these dynamics will be key to understanding where crypto is headed next.

Market Data Points

Trading bot activity has significantly declined compared to earlier this year. Solana and BSC continue to dominate the remaining volume, but overall participation is clearly thinning out across chains.

Stablecoin momentum is building on Sui and Sonic. Sui saw a strong +23.5% weekly gain in stablecoin market cap, driven largely by USDC (75.74%), with nearly $676M issued natively. While total bridged liquidity remains modest, the upward trend signals growing trust and organic on-chain usage.

Sonic stands out with an even sharper +28.6% jump this week. USDC accounts for 81.25% of its $566M stablecoin cap, but most of this liquidity is bridged ($486M), suggesting it’s becoming a key destination for capital rotation rather than issuance—likely benefiting from recent activity surges across Solana-adjacent chains.

DEX bot volumes have plunged from over $600M/day in January to under $100M/day in April. Key tools like Moonbot and Unibot show sharp declines, pointing to fading speculation and thinning market activity.

Spark has seen a major surge in the past week, with its TVL jumping +69.1%, the largest 7-day increase among the top protocols.

Spark is a DeFi lending market built by the MakerDAO ecosystem, designed to offer efficient access to DAI liquidity. This sharp rise signals renewed interest in Maker-affiliated protocols and possibly growing demand for decentralized stablecoin lending.

Ethereum led net flows last week—and it’s happening again. Over the past 7 days, Ethereum saw $1.1B in inflows against $952.8M in outflows, locking in a net gain of $159.6M. Base and Sonic followed with smaller inflows, while Arbitrum (-$110M) and Berachain (-$185M) posted heavy outflows. Capital rotation continues to consolidate around Ethereum.

Majors & Memes

While Bitcoin has surged back into the spotlight, reclaiming key levels with conviction, the altcoin market continues to reflect a more uneven and cautious tone. This week’s bounce in risk appetite has pulled some majors off their lows, with coins like Ethereum and Solana attempting to stabilize after a series of heavy drawdowns. 

Yet momentum across much of the space remains fragile. For many alts, the recent upside feels less like a return of confidence and more like a necessary repricing after weeks of sharp liquidations.

Among the few standouts, XRP and TRON have quietly carved out relative strength. Beyond short-term price action, both continue to show high levels of profitability among holders—an outlier trend that hints at deeper resilience. 

Their performance isn’t just technical. It reflects underlying narratives: XRP’s ongoing regulatory clarity and financial infrastructure play, and TRON’s growing role in stablecoin movement and emerging market usage. In a market where conviction is scarce, these factors matter.

Dogecoin saw renewed interest on the back of ETF speculation, briefly recapturing headlines—but the move lacked follow-through. Without clear institutional engagement, these rallies risk fading as quickly as they arrive. Cardano and other high-cap alts remain stuck in consolidation, showing little evidence of accumulation or fresh momentum.

What we’re seeing is a selective market—capital is moving, but it’s moving with discretion. Traders are prioritizing structure, clarity, and real-world use cases over hype. Projects with loose narratives or weak fundamentals are simply drifting, waiting on macro relief or sector-specific catalysts that have yet to materialize.

Until that shift comes, altcoins will likely continue to follow, not lead. In a landscape still shaped by geopolitical stress and monetary uncertainty, the bar for breakout performance has been raised. Strength is being earned the hard way.

Smart Money Accumulation

Smart money flows in the Solana ecosystem this week show a clear rotation rather than an exit. The standout is JOCKEY, which saw an explosive >1000% increase in holdings, suggesting growing conviction and possibly early positioning for a new narrative. 

TITCOIN also saw steady accumulation, with holdings up 7.14% and balances reaching $1.6M—matching FARTCOIN, which despite being the largest holding, saw a sharp 36% reduction, signaling a clear de-risk.

Several older names, including TRUMP, DARK, BUTTCOIN, and HOUSE, were heavily reduced—each down between 31% and 78%—as wallets rotated out. 

GRIFFAIN saw modest gains (+9%), while ALON and MEMEWAR remained flat, suggesting little conviction either way.

Overall, capital isn’t leaving Solana—it’s reallocating. A few names are emerging as favorites, while older plays are being trimmed aggressively. The reshuffling suggests smart wallets are setting up for the next leg in the Solana meme meta.

Smart money activity in the Ethereum ecosystem this week shows a mix of cautious trimming and high-conviction rotations into select names. The top standout is MOODENG, which saw a staggering +272% surge in holdings—albeit with a relatively modest balance, indicating aggressive speculative positioning. KTA also drew notable attention, up +134%, suggesting it’s gaining traction among deeper wallets.

CULT remains the dominant holding by value at over $500K and saw steady accumulation (+12.75%), reinforcing its status as a core position. Mog and SHRUB saw smaller inflows, up 2.66% and 11.9% respectively, consistent with low-risk re-entries or DCA strategies.

On the flip side, DOGE and WOLF were trimmed sharply, down 26% and nearly 13%, signaling a drop in confidence or profit-taking after recent bounces. BITCOIN saw a -9.87% reduction, possibly a sign that the meme rotation narrative is thinning on ETH for now.