Crypto markets will be pressured by trade wars until April: analyst
Bitcoin’s turbulent journey continues as it faces multiple pressures from macroeconomic factors, notably the looming global trade war and volatility in interest rates set by the Federal Reserve. Following President Donald Trump’s announcement of import tariffs on Chinese goods on January 20, Bitcoin’s price has plummeted over 17%. Analysts predict that the intertwined challenges of the trade war and monetary policies will keep risk assets, including cryptocurrencies, under pressure until potential resolutions emerge.
Nicolai Sondergaard, a research analyst at Nansen, noted during Cointelegraph’s Chainreaction show on March 21 that the market is anxiously anticipating the outcomes related to trade tariffs as April approaches. “I’m looking forward to seeing what happens with the tariffs from April 2nd onwards,” Sondergaard stated, emphasizing that the resolution could serve as a catalyst for market movements. However, uncertainty remains predominant, with many investors awaiting a comprehensive agreement from all parties involved in the trade discussions.
As we approach April 2, when Trump’s reciprocal tariff rates are set to activate, concerns over trade are likely to stifle market momentum. The situation presents a complex backdrop for cryptocurrency investors, who may find their decisions increasingly tethered to geopolitical events.
Compounding these challenges is the environment surrounding the Federal Reserve’s interest rate policies. Currently, there is an 85% probability that the Federal Reserve will choose to maintain steady interest rates during the upcoming Federal Open Market Committee meeting on May 7, according to estimates from CME Group’s FedWatch tool. Until the Federal Reserve makes a move—likely in response to considerable economic data indicating the need for rate cuts—investors may be hesitant to increase their risk exposure.
Sondergaard indicated that the market is waiting for definitive “bad news” that would compel the Fed to initiate rate cuts, which could ultimately prove beneficial for risk assets, including cryptocurrencies. Recent indicators suggest that inflationary pressures may be easing, creating an opportunity for gradual improvement in investor sentiment.
In a statement reflecting on future economic indicators, Iliya Kalchev from Nexo commented, “Cooling inflation and stable economic conditions could further boost investor appetite, driving additional upside for Bitcoin and digital assets.” He highlighted the importance of monitoring key reports such as Consumer Confidence, Q4 GDP, and jobless claims to better gauge the prospect of rate adjustments.
As Bitcoin continues to navigate this landscape of uncertainty and pressure, investors are encouraged to remain vigilant for signs of change. Often, major market catalysts arise unexpectedly—whether through the resolution of trade disputes or shifts in monetary policy—offering potential opportunities for those prepared to act.
