Crypto markets tumble as US tariffs hit markets

Bitcoin price rose above the $87,000 mark in early trading on Wednesday but plummeted below $83,000 after the announcement of US tariffs later in the day. If BTC price declines, support can be found at $81,000, while resistance may be encountered at $88,400. 

Ethereum was hit hard as well, dropping from 1,900 to below $1,800 on Wednesday. If the Ethereum price declines, it may encounter support near $1,750, while if it increases, it may encounter resistance near $2,050.

Most major cryptocurrencies are under pressure due to concerns that US President Donald Trump’s trade policies may start global trading wars. The uncertainty over Trump’s future policies and trade tariffs is generating a risk aversion sentiment, putting pressure on crypto markets. 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. 

Trump’s tariffs may spark global trade wars and are causing turmoil in markets. On Wednesday, 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 an aversion and putting pressure on cryptocurrencies. 

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 to launch 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 to 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.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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