The cryptocurrency market is on edge as U.S. President Donald Trump prepares to announce sweeping tariffs against over 25 countries on April 2, 2025, a day dubbed “Liberation Day.” The announcement, expected to target major trading partners like China, Canada, and Mexico, has already introduced significant uncertainty across global financial markets, including cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH).
Bitcoin’s Pre-Liberation Day Movements
Bitcoin has experienced notable price action in the lead-up to Liberation Day. After breaking above $85,000 earlier this week, BTC pulled back to $80,000 on Monday. Over the past seven days, Bitcoin has shown a bearish trend, reflecting broader market unease. As of this morning, Bitcoin is trading at $84,327, up 1% in the last 24 hours but still far below its early-year high of nearly $110,000.
The first quarter of 2025 was challenging for the crypto market. Bitcoin saw an 11.82% decline over Q1, while Ethereum suffered a more severe loss of 45.41%. Analysts are now divided on how Trump’s tariff announcement will impact cryptocurrencies in the short term.
Potential Scenarios for Bitcoin
Historically, Bitcoin’s price has been sensitive to global economic and trade uncertainties. For example:
- During the U.S.–China trade war in 2018, Bitcoin lost over 27% of its value as markets faced heightened volatility.
- Conversely, periods of dollar weakness have sometimes boosted Bitcoin as investors seek alternative assets.
If Trump’s tariffs strengthen the U.S. dollar in global markets—a likely outcome—Bitcoin and other cryptocurrencies could face downward pressure. A stronger dollar typically reduces demand for non-sovereign assets like Bitcoin.
On the other hand, if the tariffs destabilize global trade or weaken confidence in fiat currencies, Bitcoin could benefit as a hedge against economic uncertainty. Some analysts believe this scenario could push BTC back toward $90,000 or even higher by the end of April.
Market Sentiment and Broader Trends
The crypto market’s current volatility is also influenced by other factors:
- Seasonal Trends: April has historically been a strong month for Bitcoin, with an average return of 27% since 2010. This seasonal pattern offers a glimmer of hope for bullish investors.
- Macroeconomic Pressures: Rising gold prices and concerns about a potential recession have driven investors toward safer assets like gold and bonds, reducing appetite for riskier assets such as cryptocurrencies.
- Federal Reserve Policy: High interest rates aimed at combating inflation may further dampen liquidity in crypto markets.
What to Watch Next
Trump’s Liberation Day announcement is scheduled for later today at 10 PM CET. Investors are closely monitoring the details of his tariff strategy to gauge its impact on global markets and cryptocurrencies. While short-term volatility is almost certain, the long-term implications for Bitcoin will depend on how these policies influence global trade dynamics and investor sentiment.
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