Trump’s Tariffs Spark Market Reaction
Over the weekend, President Donald Trump announced 25% tariffs on imports from Canada and Mexico, alongside a 10% tariff on Chinese goods, effective from Tuesday. The U.S. engages in approximately $1.6 trillion in trade with these three nations annually.
Canada and Mexico, the United States’ top trading partners, immediately pledged to impose retaliatory tariffs, while China stated that it would challenge the levies at the World Trade Organisation.
Investor Sentiment and Market Response
“Crypto is really the only way to express risk over the weekend, and on news like this, crypto resorts to a risk proxy,” said Chris Weston, head of research at Pepperstone, told CNBC News. Investors are concerned that continued trade conflicts may weaken economic growth, impact corporate earnings, and contribute to inflation.
Bitcoin previously reached a record high of $107,071.86 on January 20, the day of Trump’s inauguration as the 47th U.S. President. The cryptocurrency had surged 40% since the November election, driven by expectations that the Trump administration would introduce crypto-friendly regulations. During his campaign, Trump had pledged to transform the United States into the “crypto capital of the planet.”
Regulatory Expectations and Disappointment
Despite optimism following Trump’s election, some investors have expressed disappointment over the lack of immediate regulatory changes. Last month, Trump directed the creation of a cryptocurrency working group to propose new regulations and explore a national cryptocurrency stockpile.Jeff Park, head of alpha strategies at Bitwise Asset Management, commented on the long-term implications of the trade conflict. “A sustained tariff war will be amazing for bitcoin in the long run due to an eventual weakening of the dollar and U.S. rates.”
Key Support Levels and Future Outlook
Market analysts are closely watching the $90,000 support level for bitcoin. Some have cautioned that if bitcoin falls significantly below this level, a further decline towards $80,000 could follow. Historically, experienced crypto traders have seen corrections of approximately 30% during bull market cycles.
While short-term price movements remain volatile, many investors view bitcoin as a hedge against inflation and economic instability. However, its immediate trajectory continues to be influenced by broader market trends and geopolitical developments.
