Cryptocurrency and shares traders hoped to solve at the last minute that would prevent the US from introducing 104% of tariffs to Chinese goods entering the United States, but at a press conference the White House confirmed that the tariffs would start on April 9. Markets have deteriorated when Peter Navarro, an advisor to US elements for US President Donald Trump, said that the tariffs would not be negotiating.
As a result, the S&P 500 rate was closed on April 8 with a loss of 1.6%, withdrawing earlier profits by 4%. This deterioration of the situation meant that traders wondered if Bitcoin (BTC) could regain their stubborn momentum among deteriorating macroeconomic conditions.
Spiral debt problems in the USA remain by paving the way for bitcoin profits
Between April 2 and April 7, the S&P 500 indicator dropped by 14.7%, causing panic among Bitcoin owners and forcing USD 75,000 rethaine – the lowest for over five months.
S&P 500 Futures (on the left) vs. Bitcoin/USD (right). Source: Tradingview / Cointelegraph
During the performance of Israel’s prime minister Benjamin Netanyahu, on April 7, President Trump reportedly said that his goal was to “reset the table” on trade. He added that “permanent tariffs may exist, and negotiations may occur because there are things we need outside the tariff.” Among that uncertaintyAccording to Yahoo Finance IPO and mergers were delayed, while leveled bonds and bond offers were moved to the side.
It becomes clear that the stock market is likely to be collected if the risk of trade war is disappearing. Economists warned that tariffs can cause inflation And according to Reuters, they significantly boost the chances of economic recession. However, the assessment of the impact on the price of Bitcoin remains a hard task. This is due to the fact that some investors perceive a eternal cryptocurrency monetary system as a protection against continuous expansion of global supply of FIAT currencies.
Low -term correlations will hurt BTC, but possible cuts of interest rates may turn the tide
In the brief period, it is expected that a positive correlation between bitcoins and the stock exchange will persist. Nevertheless, the fiscal challenges of the US government are a potential chance to boost the price of Bitcoin. On April 8, the 10-year profitability of the US treasury increased to 4.28%, after a brief decline to 3.90% on April 7. This boost suggests that investors demand higher returns to maintain these assets.
American dollar indicator (DXY, on the left) vs. 10-year treasure profitability (on the right). Source: Tradingview / Cointelegraph
It is expected that the growing cost of moving by $ 9 trillions of the federal government debt over the next 12 months will boost the fiscal imbalance and weakens the American dollar. The American dollar index (DXY) devoured from the profitability of the US Treasury, falling to 103.0 on April 8 of 104.2 March 31. This situation can potentially support the price of Bitcoins – a sentiment shared by Blackrock Larry Fink in a letter of March 31 to investors.
Related: The weaker Juan is “stubborn for BTC”, as Chinese capital is approaching Crypto – Bybit CEO
Michael Gapen, chief economist Morgan Stanley, It was found In the client’s note of April 8: “We think that the correct answer is longer waiting in the current position,” as reported by CNBC. According to the updated Morgan Stanley forecast, the US Federal Reserve is expected to keep interest rates of 4.25% -4.50% to March 2026, adding that “only the recession will change the account” and “the recession may mean earlier and larger cuts in advance.”
Bitcoin’s momentum will probably change positively, because traders are aware that the US Federal Reserve has restricted tools to avoid recession without the risk of inflation. Although the anticipation of the exact period of a breakthrough remains uncertain, prolonged delays in solving trade problems can lead investors towards restricted assets such as Bitcoin, especially in fear of the potential devaluation of the American dollar.
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.
