Cryptocurrency markets face pressure from trade war fears until early April, with Bitcoin’s price dropping over 17% since January. Analyst Nicolai Sondergaard indicates a potential market recovery if tariffs are resolved. Interest rates from the Federal Reserve are also impacting investor sentiment, highlighting the need to monitor key economic reports for future market direction.
Concerns over global trade wars continue to loom large over cryptocurrency and traditional markets. According to Nicolai Sondergaard, a research analyst at Nansen, these pressures are likely to stick around at least until the beginning of April. In fact, Bitcoin (BTC) has already taken a hit, plummeting more than 17% since the announcement of import tariffs on Chinese goods by President Trump on January 20, right after his inauguration.
Sondergaard was a guest on Cointelegraph’s Chainreaction daily X show on March 21, where he shared his insights. He noted, “I’m looking forward to seeing what happens with the tariffs from April 2nd onwards, maybe we’ll see some of them dropped but it depends if all countries can agree. That’s the biggest driver at this moment.” The potential for a resolution could possibly act as a much-needed market catalyst moving forward.
As the market navigates these tariff-related fears, which we could expect to see evolving between April 2 and July, risk assets appear to lack direction for now. According to Sondergaard, this period could yield a positive market shift once concerns are eased.
Moreover, the effect of high interest rates is adding another layer of pressure on investors. Untangling the Federal Reserve’s next moves has become critical. Sondergaard points out that the market is anxiously waiting for the Fed to act, stating, “We’re waiting for the Fed to see proper ‘bad news’ before they will really start cutting rates.” Right now, there’s an 85% chance the Fed will keep interest rates at their current levels during the next FOMC meeting slated for May 7, based on the latest estimates from CME Group’s FedWatch tool.
In this turbulent landscape, analysts remain hopeful. Iliya Kalchev, dispatch analyst from the Nexo digital asset platform, suggests that the Fed views inflation and recession-related issues as transitory which could bode well for investors. He explains that cooling inflation paired with stable economic conditions may indeed spark renewed interest in Bitcoin and other digital assets, saying, “Markets may now expect upcoming economic data with greater confidence.”
Looking ahead, it’s crucial for investors to watch upcoming reports, including Consumer Confidence data, fourth-quarter GDP results, jobless claims, and a pivotal PCE inflation release, as they will be instrumental in assessing the likelihood of future rate cuts and the health of market sentiment.
In summary, the cryptocurrency market is bracing for continued pressure due to ongoing trade war anxieties, which are expected to linger until at least the beginning of April. High interest rates from the Federal Reserve’s policies further complicate the landscape for risk assets. However, the potential resolution of these tariff issues and positive economic indicators could provide a necessary lift for Bitcoin and other cryptocurrencies in the upcoming weeks. Investors would do well to keep a close eye on key economic reports to gauge market trends.
Original Source: cointelegraph.com
