Bitcoin (BTC) and the crypto market have recovered quite well following Trump’s 90-day tariff pause on April 9. Notably, Bitcoin closed off last week at around the $83,760 level, which marked a 6.8% increase from the previous week’s close. With investor’s regaining confidence, the price of BTC even climbed above 86.2K level on April 15.
However, the ongoing trade tariff war between China and the U.S is still weighing down on the market. The total crypto market cap (TOTAL), which was recovering from the $2.39 trillion, has hit resistance at $2.67 trillion according to data on TradingView. Currently, it is standing at $2.6 trillion depicting the continued tariff weigh-down.
Additionally, Bitcoin has retracted back to the $83,696.03 level. An exclusive insight shared by Matteo Greco, the Research Analyst at Fineqia International, highlights the tariff-induced risks that lie ahead.
Trump’s Pause Boosted Market Sentiment; But More Risks Lie Ahead
The recent performance of the crypto market was boosted by Trump’s pause on tariffs to other countries, besides China. According to Matteo Greco, “this policy shift encouraged market participants to increase exposure to risk-on assets, driving price increases for both equity and digital asset markets.” However, Fineqia’s research analyst also added that the Consumer Price Index (CPI) data played a big part too.
“Lower-than-expected CPI data further fueled positive momentum across risk markets during the week,” Greco added. As per the official press release dated April. 10, the CPI for all urban consumers fell by 0.1%, in March.
While the macro factors seem to be pushing the positive market sentiment, there are risks that lie ahead. These risks stem from the fact that the U.S hasn’t done away with the tariffs fully.
“While the US administration has softened the tariffs on certain goods—particularly tech-related items like smartphones, tablets, and electronics—these products still face tariffs as high as 20%, driving high risk of upward pressure on consumer prices,” Greco remarked.
Potential Implications of the Tariff War and Impact on Crypto
The ongoing tariff war between China and the U.S as well as changing trade dynamics pose risks to the crypto market. Through heightened economic instability and diminishing retail participation in digital assets like Bitcoin, the crypto market could be impacted negatively.
With the tariffs, higher import costs in the US could push inflation levels through the roof. “As globally traded goods are subject to tariffs when entering the US, this could drive prices higher and contribute to domestic inflation,” wrote Greco.
Such a scenario would push the Fed to tighten monetary policies by raising interest rates in an effort to curb inflation. While these measures would strengthen fiat currencies, it would reduce liquidity in digital assets. Crypto investors might thus opt for safer investment options as consumer spending and corporate earnings drop.
Continued tariff wars might continue to weigh down on assets like BTC which relies heavily on favorable macro conditions. Altcoins might also follow suit as a dip in price of Bitcoin would dampen sentiment across the market.
Bitcoin’s Price Performance and Key Levels to Watch
According to the daily chart on TradingView, Bitcoin is trading at $83,696.03 as of this writing. The current price marks over 2.4% decline on the day signifying that the tariff uncertainty is still prevalent in the market.
If the tariff pressure continues, Bitcoin could dip further as investors venture into safer options. Currently, BTC has strong support around the $81,120 level. A breach of this level would see the price drop further with the next support at $78,286.
However, if BTC defies the pressure from tariff uncertainty, the price could surge. Bitcoin faces strong resistance around $85,337 and flipping this level into support is crucial for upward price movement. The next resistance exists at $88,831 and breaching it would confirm bullish momentum. Under current market conditions, Bitcoin is more likely to continue in a range-bound price movement.
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