The first week of May is almost over and Bitcoin managed to slide below $94,000. While at first glance, that bearish outcome could be interpreted as a bleak sign, it may not necessarily signal what’s to come.

Over the last few days, a sense of uncertainty crept back into the Bitcoin as the bulls pulled back. This is mostly because the bears showed signs of a comeback after price pushed into overbought territory.

Nevertheless, Bitcoin market sentiment remained in greed and profit-taking was minimal. Perhaps indication that the market maintained a healthy degree of optimism. The reasons behind this optimism could be rooted in the same macro-economic factors that trigged the Q1 selloff.

Economic concerns wane paving the way for more market confidence

Although the pause on tariffs had the markets enter recovery mode, concerns over knock on effects have loomed over the markets like a dark cloud.  However, recent data may inject more confidence back into the market.

According to recent reports, the U.S has been holding talks with multiple countries.  Among them include India which will allow the two countries to trade steel and auto parts with zero tariffs.

Mexico’s president also revealed that talks with the U.S administration were going well.  This not only means the tariff war was cooling down further, but also that the new deals might potentially soften the projected economic fall-out.

These observations may boost confidence among the investor cohort and potentially courage more engagement with risk-on assets including Bitcoin.

Institutional Bitcoin demand makes a strong comeback

Bitcoin also kicked off May with a noteworthy surge in institutional demand. Roughly $991.7 million worth of net positive flows were observed since the start of May. A sign that institutional buyers were maintaining the same accumulation trend observed since the last week of April.

The return of institutional demand may have a hand in the recently observed resilience against more downside. As a result, Bitcoin managed to stay well above $90,000. A reflection of the aforementioned sentiment.

However, these observations may not necessarily shield BTC from more downside. Especially given its sensitivity to macro-economic factors. Unfavorable outcomes could still send Bitcoin tumbling down, but on the price side, the recent data could potentially shift the tide in favor of more recovery.

BTC’s current prospects include the possibility that we could see it rally above $100,000. On the downside, price could potentially slip and lose over $10,000 per coin if the market continues to crash.

 

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