Bitcoin is experiencing high volatility and showing wild moves on both sides. The market dumped and pumped more than $10,000 yesterday because of the Trade war. The US President Donald Trump announced Traffic policies to be implemented against China and the markets reacted to the news.
What is the impact of the Trump trade war on Bitcoin?
Trump’s proposed tariffs pose a significant inflation risk, which could impact the Federal Reserve’s approach to rate cuts. Higher tariffs would lead to inflation spikes, forcing the Fed to maintain a slow and cautious stance rather than aggressively cutting rates. This “higher for longer” neutral rate scenario would weaken liquidity flows into risk assets like the S&P 500 and Bitcoin, putting downward pressure on their prices.
At the same time, slower rate cuts would increase demand for the U.S. dollar, causing XXXUSD pairs (eg. BTCUSD, EURUSD, SPXUSD) to decline. The irony here is that while Trump is pushing for faster rate cuts, his own tariff policies would likely delay them.
Overall, as long as the real Fed interest rate remains above CPI levels, inflation will continue to trend downward. However, baseline turbulence in the markets should be expected, creating uncertainty for investors.
What does the Chart say?
Bitcoin has once again bounced off the major support area, showing strong buying pressure in this zone. The price has also reclaimed the 50 DMA, which is a positive sign for the bulls. Additionally, Trump’s delay on the tariff decision has fueled the market’s recovery, leading to a strong pump.
However, volatility is expected until the dust settles, so stay cautious in the coming sessions. 🚀📈
There are mixed signals on the chart but the good thing is that the price is able to hold the $90,000 key support area and bounced from there. The buyers are active in this zone and every time we see good buying volume. The next couple of days are very crucial for the market and will decide the next move.
China’s reply to Trump’s traffic policies
China has announced new tariffs on U.S. energy exports, including a 10% tariff on oil and 15% tariff on coal and LNG.
This move could escalate trade tensions and impact global energy markets. Expect volatility ahead. 🚨
