Despite the 2.2% Bitcoin acquired on April 1, BTC (Btc) has not been exchanged above $ 89,000 since March 7. Although recent price weakness has often been linked to the rising US-led trade war, many factors weigh the investor’s sentiment long before President Donald Trump announced the tariffs.
Some market participants claimed The $ 5.25 billion worth of Bitcoin purchases since February is the main reason the BTC will be held above the $ 80,000 support. But, regardless of who the buyer is, the fact is that Bitcoin shows a limited reversal before President Trump announced 10% Chinese import tariffs on January 21.
Gold/USD (left) compared to bitcoin/USD (right). Source: TradingView / Cointelegraph
The S&P 500 index struck a full time high in Feb. Although the trade war has certainly affected the investor’s risk, strong evidence suggests a weakness in Bitcoin’s price that began properly before President Trump opened up on January 20.
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Another point of data that weakens the relationship with tariffs is the area Bitcoin Funds exchanged by exchange . In essence, institutional demand for Bitcoin continued despite the rise of the trade war.
Part of the frustration of Bitcoin businessmen after January 21 which came from excessive expectations surrounding President Trump Promise of campaign of a “strategic national bitcoin stockpile,” mentioned at the Bitcoin Conference in July 2024. As investors increased, their failure sank when the actual executive order was issued on March 6.
A major factor behind the Bitcoin struggle to break above $ 89,000 is an inflationary trend, reflecting a relatively successful approach of global central banks. In February, the US Personal Consumption Expenditures (PCE) price index increased by 2.5% year-on-year, while the Eurozone Consumer Price Index (CPI) rose 2.2% in March.
Investors become more risky-averse following weak data in the work market
In the second half of 2022, Bitcoin’s acquisitions were driven by inflation climbing above 5%, suggesting that businesses and families turned around Cryptocurrency as a fence Against finance. However, if inflation remains relatively controlled by 2025, lower interest rates will favor real estate and stock markets more directly than Bitcoin, as reduced financing costs will boost those sectors.
US CPI Inflation (left) compared to us 2-year yield of treasury (right). Source: Tradingview
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The weakening job market licks the demand of entrepreneurs for risk assets, including Bitcoin. In February, the US Labor Department reported work openings near a four -year low. Similarly, the US 2-year-old cries of wealth fell to a six-month low, with investors receiving a moderate 3.88% return for the safety of government-supported instruments. This data suggests a rising option for rising risk, which is not desirable for Bitcoin.
Ultimately, the weakness of Bitcoin prices came from unrealistic expectations of US BTC acquisitions of the US Treasury, refusing inflation that supports potential reductions in interest rate, and a more risky-averse macroeconomic environment as investors turn to short-term government bonds. While the trade war has a negative effect, Bitcoin shows signs of weakness before it begins.
This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.
