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The divergence in ETF netflows continues but at relatively low levels. Bitcoin ETFs saw $83M in inflows on Friday, extending their streak, while Ethereum ETFs recorded $19M in outflows, continuing its trend. However, we anticipate this divergence will soon subside as Ethereum, having corrected more sharply, presents stronger upside potential. Despite these movements, overall trading volumes remain weak, indicating a lack of strong institutional engagement for now.
With the April 2nd tariff deadline approaching, a White House official hinted that "Liberation Day" may be more nuanced than previously suggested by Trump. While reciprocal tariffs are still expected, they are likely to be sector-specific, and uncertainty remains regarding tariffs on Mexico and Canada. Given that investor expectations for limited tariffs have increased, any deviation from these expectations could introduce market volatility.
Markets responded positively as tariff risks appear to be moderating, the Federal Reserve signals a more dovish stance, and liquidity injections loom. In response, Bitcoin surged 3.5%, Ethereum gained 5%, and Solana led with an 8.5% increase.
Outlook and Positioning
With digital assets gaining momentum and favorable macroeconomic conditions emerging, the short-term outlook remains bullish. However, Trump’s unpredictability remains a potential risk factor, as a sudden shift in tariff strategy could quickly dampen sentiment. Given the improving setup, we maintain our current positioning:
- Overweight Solana (SOL) – Outperforming amid risk-on sentiment.
- Neutral Bitcoin (BTC) & Ethereum (ETH) – Strong support levels, awaiting further catalysts.
We recommend staying heavily exposed, as the combination of easing tariff concerns and the Fed’s dovish tilt could propel Bitcoin back above $90K in the coming days.
