The price of Bitcoin (BTC) climbed over $100,000 in January, boosted by hype around Donald Trump’s new administration.
Investors hoped regulatory reforms and the Bitcoin Strategic Reserve would boost prices. Instead, the crypto market has failed to meet expectations lately, with Bitcoin trading within the $80,000 range for most of March.
Markets Brace Up for Trump’s Reciprocal Tariffs
For now, the market is anticipating Trump’s reciprocal tariffs, raising questions about how BTC will react in the long run. President Trump plans to implement a new round of reciprocal tariffs on April 2, dubbed “Liberation Day” for the US economy. The President recently disclosed that he has no plans to soften his tough stance on trade policies.
His reciprocal tariffs are targeting 15 countries, including China, Canada, and Mexico, all of which have already imposed tariffs on the US. The stock market is already feeling the impact of the ongoing trade war, with the S&P 500 down over 2% over the past five days. Crypto prices have also taken a hit as they’ve become more tied to traditional assets like stocks and bonds.
Notably, the price of Bitcoin could face short-term price swings as it often follows the traditional market trends. As highlighted in our previous article, BTC dropped sharply after the US government imposed tariffs on Canadian, Mexican, and Chinese imports. The depreciation also impacted the leading altcoin sector. Ethereum experienced a drop of about 20%, XRP saw a 22% decrease, while Solana (SOL) lost 8% of its value.
Furthermore, the crypto market took a sharp downturn following Donald Trump’s confirmation of a 25% tariff on European Union imports. As noted in our earlier post, Bitcoin dropped to $84,000, pulling the crypto market down with it, as Ethereum fell 5.54% in 24 hours.
With the markets preparing for Trump’s reciprocal tariffs, Wall Street has raised concerns about a global recession, making investors wary of risky assets like crypto.
Chief Economist at ADM Investor Services International, Marc Ostwald said markets are losing their risk appetite. This pushes crypto further from safe-haven assets like gold, which remains the go-to choice in uncertain times.
Bitcoin Price Analysis and Optimistic Sentiments
At press time, the Bitcoin price was $84,635, up slightly by 0.6% over the previous day. The daily trading volume increased by 5.24%, demonstrating investors’ sustained activity.
On a positive note, Zach Pandl, head of research at Grayscale, explained that the negative impact of tariffs on crypto may have already passed. He believes that the Liberation Day could ease financial market struggles.
To him, markets will likely rally if the tariffs are tough but phased, targeting 15 countries. Padl further noted that the tariffs would reduce the demand for the US dollar and open the door for other currencies like Bitcoin. Despite the current negative sentiment around Bitcoin’s price, Padl believes the asset will reach new all-time highs this year.
In a recent study, we reported that Network economist Timothy Peterson forecasted that BTC could hit $126,000 by June.