On April 4, 2025, China announced it would impose a 34% tariff on U.S. products in retaliation for tariffs declared by President Trump. This move has raised concerns in the market about potential crisis scenarios, causing ripples of uncertainty among investors and traders alike.
In the wake of this announcement, Bitcoin, the world's leading cryptocurrency, displayed a long, declining red candlestick on the chart. Despite the turmoil in the crypto market, it has managed to maintain a relatively stable tone, holding steady around the $80,000 mark. Sergei Gorev, the Risk Officer at YouHodler, characterized the situation as a weak scenario for the American stock market and global trading participants. He further warned that if Bitcoin prices fall below their March lows, a crisis scenario could unfold in 2025.
Javier Rodriguez-Alarcon, Chief Commercial Officer at XBTO, noted in comments to Forbes that Bitcoin is currently trading within the $80,000 to $90,000 range. He predicted that the timing of any breakout from this range will be the next significant incident, potentially determining the future direction of Bitcoin prices. Experts are advising investors to monitor macroeconomic indicators closely, given the expected market volatility stemming from the U.S.-China tariff situation.
As the trade war heats up, several cryptocurrency investment projects have begun attracting attention. Among them are BTC Bull Token (BCBULL), Solaxy (SOLX), and Best Wallet Token (BEST). BTC Bull Token features a unique token burning mechanism and airdrop function that ties its performance to Bitcoin's growth. Solaxy offers L2 solutions for the Solana blockchain, employing roll-up architecture, which is a first for Solana and positions it as a pioneering project. Best Wallet Token supports an ecosystem that provides functions beyond mere cryptocurrency custody and exchange, allowing investors to access new cryptocurrency ICOs through its Token Launchpad feature.
The current tariff war has sparked fears of a crisis, which could impact Bitcoin's stability. Although Bitcoin has shown resilience so far, the enforcement of these tariffs raises concerns about potential market downturns. Investors are thus urged to seek safer investment opportunities during this tumultuous period. The pre-sale projects mentioned could be viable candidates for those looking for the best cryptocurrencies to buy now.
In a related report from March 8 to March 14, 2025, bitbank's analyst, Tomoyoshi Nagatani, provided insights into Bitcoin's performance against the Japanese Yen. As of April 4, 2025, Bitcoin was trading around 12 million JPY, lacking clear direction. At the start of the week, the BTC market saw an uptick, rising from 12.2 million JPY to approximately 12.5 million JPY, spurred by a rebound in the U.S. stock market. However, this momentum was short-lived as the Chicago Mercantile Exchange's BTC futures failed to fill the gap.
On April 1, Bitcoin managed to break through the 12.5 million JPY mark, benefiting from expectations of a drop in U.S. interest rates. Nevertheless, the price faced a temporary plunge due to adverse U.S. economic indicators, although it recovered to 12.7 million JPY, buoyed by speculation of interest rate cuts by the Federal Reserve and a rise in U.S. stocks.
By April 2, Bitcoin's price briefly touched 13 million JPY but fell back to around 12.3 million JPY after Trump announced stricter-than-expected mutual tariffs, erasing earlier gains. On April 3, as a risk-off sentiment spread across global financial markets, Bitcoin's value dropped further, dipping below 12 million JPY.
Despite these fluctuations, the U.S. Senate Banking Committee voted to appoint Paul Atkins as the next U.S. SEC Commissioner, a decision that could have implications for the cryptocurrency landscape. The ISM Non-Manufacturing PMI also declined, which supported the decline in U.S. interest rates and allowed for a gradual recovery in Bitcoin's price.
The risk-off sentiment triggered by the announcement of mutual tariffs has reverberated globally, with Bitcoin experiencing a drop of 1 million JPY. However, the selling pressure appeared to ease during U.S. trading hours on April 3. Meanwhile, concerns surrounding the trade war and a potential global economic recession continue to loom large.
In the futures market, traders are beginning to factor in an interest rate cut at the upcoming May 2025 FOMC meeting, indicating a shift towards anticipating financial easing in the face of economic downturns. As risk aversion strengthens, there has been an acceleration of capital flight from the dollar, with some funds potentially flowing into Bitcoin.
Before the announcement of the mutual tariffs, spot Bitcoin ETFs recorded a net inflow of over $2 billion. However, by April 3, this trend reversed, resulting in a net outflow of just under $1 billion, a relatively modest figure in the context of the market's volatility.
While U.S. Trade Representative officials have denied the possibility of withdrawing the mutual tariffs, Trump has hinted at a willingness to negotiate, leaving the situation fluid and unpredictable. The high tariff rates could serve as a tactic to draw trade partners back to the negotiating table, with many eyes on whether these rates will be adjusted before the tariffs take effect on April 9.
Despite the turmoil, some analysts believe that the announcement of mutual tariffs may have already been priced into Bitcoin, suggesting a potential sell-the-fact scenario. Investors remain cautious, especially with the ongoing deterioration of the U.S. stock market, but as the flight from the dollar continues, the role of gold as a safe haven is also being scrutinized for signs of overheating.
If the Federal Reserve's interest rate cuts become more pronounced, Bitcoin could see support, and analysts expect a bottom-up trend for the cryptocurrency in the near future. Attention will be focused on the upcoming U.S. employment statistics and Chairman Powell's remarks on April 4, as well as the FOMC minutes and Consumer Price Index (CPI) data next week, which will provide further insights into the direction of U.S. monetary policy.
