Global trade war concerns will pressure both cryptocurrency and traditional markets until at least the beginning of April, but the potential resolution may bring the next big market catalyst.
Bitcoin’s (BTC) price fell over 17% since US President Donald Trump first announced import tariffs on Chinese goods on Jan. 20, the first day after his presidential inauguration.
Despite a multitude of positive crypto-specific developments, global tariff fears will continue to pressure the markets until at least April 2, according to Nicolai Sondergaard, a research analyst at Nansen.
BTC/USD, 1-day chart. Source: Cointelegraph/TradingView
The analyst said during Cointelegraph’s Chainreaction daily X show on March 21:
“I’m looking forward to seeing what happens with the tariffs from April 2nd onwards, maybe we’ll see some of them dropped but it depends if all countries can agree. That’s the biggest driver at this moment.”
Risk assets may lack direction until the tariff-related concerns are resolved, which may happen between April 2 and July, presenting a positive market catalyst, added the analyst.
President Trump’s reciprocal tariff rates are set to take effect on April 2, despite earlier comments from Treasury Secretary Scott Bessent that indicated a possible delay in their activation.
Related: Ether risks correction to $1.8K as ETF outflows, tariff fears continue
Fed’s interest rates are also contributing to market slump
High interest rates will also continue pressuring risk appetite among investors until the Federal Reserve eventually starts cutting rates, explained Sondergaard, adding:
“We’re waiting for the Fed to see proper “bad news” before they will really start cutting rates.”
Fed target interest rate probabilities. Source: CME Group’s FedWatch tool
Markets are currently pricing in an 85% chance that the Fed will keep interest rates steady during the next Federal Open Market Committee (FOMC) meeting on May 7, according to the latest estimates of the CME Group’s FedWatch tool.
Related: Crypto debanking is not over until Jan 2026: Caitlin Long
Still, the Federal Reserve indicates that inflation and recession-related concerns are transitory, particularly regarding tariffs, which may be a positive sign for investors, according to Iliya Kalchev, dispatch analyst at Nexo digital asset investment platform.
“Markets may now expect upcoming economic data with greater confidence,” the analyst told Cointelegraph, adding:
“Cooling inflation and stable economic conditions could further boost investor appetite, driving additional upside for Bitcoin and digital assets.”
“Keep an eye on key reports, including Consumer Confidence, Q4 GDP, jobless claims, and next week’s crucial PCE inflation release, to gauge the likelihood of future rate cuts,” the analyst added.
Magazine: SEC’s U-turn on crypto leaves key questions unanswered
