Despite 2.2% of Bitcoin profits on April 1, BTC (BTC) did not sell over USD 89,000 from March 7. Although the recently weakness of prices is often associated with the escalating global trade war he had, several factors have already considered investors’ moods long before President Donald Trump.

Some market participants claimed Bitcoin purchases worth $ 5.25 billion from February is the main reason why BTC maintained over USD 80,000. But regardless of who bought, in fact Bitcoin already showed a narrow position before President Trump announced 10% of Chinese import tariffs on January 21.

The S&P 500 index reached the highest level of February 19, exactly 30 days after the commencement of the trade war, while Bitcoin has not repeatedly housed over $ 100,000 in the last three months. Although the trade war certainly influenced the appetite for the risk of investors, robust evidence suggests that the weakness of Bitcoin prices began long before the office of President Trump took office on January 20.

Bitcoin ETFS spot, strategic expectations regarding bitcoin reserves and inflation trends

Another data point that weakens the relationship with tariffs are current funds from Bitcoin exchange (ETFS), in which $ 2.75 billion affects net revenues within three weeks after January 21. Until February 18, the US announced plans to apply tariffs on imports from Canada and Mexico, while the European Union and China are already revenge. Basically, the institutional demand for bitcoin was even remained as the escalation of the trade war.

Part of the Bitcoin Traders disappointment after January 21 results from excessive expectations regarding the promise of President Trump’s campaign regarding the “Strategic National Bitcoin Action”, mentioned at the Bitcoin conference in July 2024, as investors became impatient, their frustration reached the peak when the actual executive order was issued on March 6.

The key factor of Bitcoin’s fight for interrupting above USD 89,000 is an inflation trend, reflecting the relatively effective strategy of global central banks. In February, the US personal consumption price rate (PCE) increased by 2.5% year on year, while the consumer price rate in the euro area (CPI) increased by 2.2% in March.

Investors become more reluctant to risk needy data on the labor market

In the second half of 2022, Bitcoins’ profits caused an boost in inflation above 5%, which suggests that companies and families turned to cryptocurrency as a security against monetary humiliation. However, if inflation remains relatively controlled in 2025, lower interest rates would promote real estate and stock markets more directly than Bitcoin, because reduced financing costs boost these sectors.

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Weakening the job market also suppresses the demand of traders on risk assets, including bitcoins. In February, the US Department of Work submitted a job offer near the four -year lowest level. Similarly, the 2-year State Treasury in the US fell to a six-month lowest level, and investors accepted a modest refund of 3.88% for the safety of instruments supported by the government. These data suggest the growing choice of risk aversion, which is unfavorable for bitcoins.

Ultimately, the weakness of Bitcoin prices results from the unrealistic expectations of investors regarding BTC acquisitions by the treasury of the treasury, decreasing inflation supporting potential interest rates and a more reluctant macroeconomic environment when investors turn to compact -term government bonds. While the trade war had negative effects, Bitcoin already showed signs of weakness before its beginning.

This article is used for general information purposes and should not be and should not be treated as legal or investment advice. The views, thoughts and opinions expressed here are themselves and do not necessarily reflect or represent the views and opinions of Cointelegraph.