Bitcoin Fragile amid Risk Aversion
Bitcoin was up 2% for the day, hitting $84.5K, but it displayed weakness and dropped below $82K at publication, even though inflation data was positive.
The flagship cryptocurrency asset dropped from $100,000 last month to less than $80,000 this week because of several factors, including Wall Street’s risk aversion, worries about Trump’s tariffs, and fears of a recession in the world’s largest economy.
The most recent retaliatory tariffs from the European Union have increased macroeconomic uncertainty, leading cryptocurrency analysts to predict higher volatility for Bitcoin prices, which could fall below the crucial $80K support level.
The European Commission announced on March 12 that the EU would begin enforcing counter-tariffs on 26 billion euros ($28 billion) worth of US goods in April. In response to US President Donald Trump’s recent decision to impose 25% tariffs on steel and aluminum imports.
Market fundamentals have turned negative due to Trump’s intermittent tariff dispute. Trade tariffs on imports from China, Canada, and Mexico have a negative impact. Retaliatory tariffs are expected to increase the cost of foreign goods, further burdening the American people. Trump’s strategic reserve plan’s lack of new Bitcoin purchases was a disappointment, which accelerated BTC’s price moderation
The Federal Reserve’s signal that it would cut interest rates less frequently in 2025 than last year has caused the entire cryptocurrency market to plummet from its December highs, losing almost 30% of its market capitalization.
Crypto traders will likely tighten their belts and reduce exposure to riskier assets because there will be less economic liquidity. President Trump further alarmed investors by refusing to rule out a recession this year as the nation enters a “period of transition.”.
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