Crypto markets sink on global economic concerns

Bitcoin price plummeted Monday, dropping from $83,000 to $74,400, its lowest value since November. If BTC price declines, support can be found at $70,000, while resistance may be encountered at $88,400. 

Ethereum price dipped to 1,400 in early trading on Monday, but pared some losses later in the day, rising above $1,550. If the Ethereum price declines, it may encounter support near $1,400, while if it increases, it may encounter resistance near $1,950.

Most major cryptocurrencies are under pressure due to concerns that US President Donald Trump’s trade policies may start global trading wars. Trump’s tariffs are likely to raise global inflation and lower the economic outlook, promoting a risk-averse sentiment that puts pressure on crypto markets. 

Last week, Trump announced a 10% tariff on all imports into the US, as well as an additional 25% tariff on all imported automobiles and high reciprocal taxes against many countries. Crypto markets plummeted after Trump’s tariff announcement. High taxes are likely to worsen the global economic outlook, promoting a risk-averse sentiment and putting pressure on cryptocurrencies. 

Reports on Monday that Trump intends to pause tariffs for 90 days lifted market sentiment briefly. According to Reuters and other media, US National Economic Council Kevin Hassett stated that Trump is considering a 90-day pause on tariffs for all of its trading partners, except China. The White House, however, issued a strong denial against these rumors, giving rise to a risk aversion sentiment and causing cryptocurrencies to sink.

Trump has announced the creation of a national Bitcoin reserve, stressing his determination to make the US the crypto capital of the world. The US government will cease selling Bitcoin and will stockpile it instead as a store of value. Reports that US President Donald Trump is preparing lto aunch a new stablecoin owned by his family boosted crypto markets this week.

Cryptocurrency prices are also affected by central banks’ interest rates. High interest rates stifle economic growth, putting pressure on crypto markets. The US Federal Reserve kept interest rates unchanged at its policy meeting in March. FOMC policymakers voted unanimously to maintain the federal funds rate at a target range of 4.25% to 4.50%. Markets are pricing in two more rate cuts this year, with the first rate cut in June, while a third rate cut is also considered possible. 

Fed Chair Jerome Powell warned on Friday that Trump’s tariffs pose a risk to economic growth and are likely to raise inflation in the US. Fed rate cut expectations dropped after Powell’s hawkish comments on Friday, putting pressure on crypto markets.

BTC/USD 1h Chart

ETH/USD 1h Chart

TRADE CRYPTO

The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.

Written by:
Myrsini Giannouli

Share the article: