The markets have started positively following the second Sunday of April, with Bitcoin
$84,716 trading above $84,500. Although it is still challenging to speak of a definitive recovery, the ongoing higher closing prices of BTC are motivating for traders. The impact of tariffs appears to be waning. So, what is the current situation?
Bitcoin (BTC)
After a rocky start to April due to tariff implications, markets are showing signs of recovery. In fact, Fed members have indicated they will not hesitate to intervene when necessary, with various indicators showing that short-term inflation concerns are being fueled by recession fears.
Recently, Trump took a step back regarding tariffs with China, suspending sanctions on certain products. Additionally, reports suggest that discussions between Trump and Xi (the Chinese President) are forthcoming. We had warned in April that the continuous escalation of tariffs could spiral into a vicious cycle that would shake the markets before it even began.
At this stage, the outlook looks positive as the U.S. President has begun to backtrack due to panic over bond yields, raising concerns of recession and even depression. If progress is made in the ongoing negotiations with over 70 countries and approvals for the 15 trade agreements reportedly on the table are completed, it is expected that the fear in the markets will normalize, leading to a potential rise in cryptocurrencies as well. A key level for Bitcoin remains at $88,500.
Comments on Cryptocurrencies
The main reason cryptocurrencies did not perform as expected in the first quarter and April was tariffs. Given that cryptocurrencies tend to price in early and excessively, this was anticipated. Fundamental issues within crypto were overshadowed by tariffs, including significant actions taken by Trump regarding cryptocurrency. Therefore, resolutions or progress concerning tariffs suggests an ideal environment for cryptocurrencies to rise.
Cryptocurrencies like HNT, JASMY, and EOS are among those that have shown early movement with recent increases. While volume has weakened compared to yesterday, it remains strong at $75 billion compared to last week. The total market capitalization of cryptocurrencies hovers around $2.7 trillion, with the fear index at 32, indicating a move towards normalcy.
The focus for crypto today and in the coming days will be on upcoming announcements regarding tariffs. During this period, speculative movements are likely, and investors should be prepared for high volatility in both directions.
