While global risk assets are moving lower again on Friday, Bitcoin is rising, adding to modest gains yesterday and pushing above 84k at the time of writing. The largest cryptocurrency is remarkably calm alongside global assets.
Trump’s Tariffs Fuel Recession Fears
Bitcoin experienced heightened volatility on Wednesday after Trump’s trade tariff announcement fueled recession fears. BTC spiked to a high of 88.5K before dropping to a low of 81.2 K in the hours following the unveiling of the highest trade tariffs on imports into the US in a century.
However, Bitcoin held relatively steady on Thursday and continues to drift modestly higher on Friday, putting it on track to book weekly gains of over 1.3%. This is a stark comparison to the Nasdaq 100, which plunged 5.4% yesterday in its steepest selloff since 2022. Meanwhile, the S&P 500 tanked 4.8% in its largest one-day decline since 2020 and the dark days of the pandemic. On a weekly basis, the Nasdaq is set to fall 4.4% and the S&P 500 3.3%.
Even Gold Wasn’t Spared…
The aggressive sell-off in equities didn’t spill over into the crypto space as Bitcoin remained relatively unfazed despite the market chaos and rising fears that Trump’s tariffs could derail global growth. This is particularly notable given that Bitcoin had been trading more like a risk asset than a safe haven in recent months and that even Gold wasn’t spared in yesterday’s selloff.
The precious metal fell from an all-time high of $ 3,168 to a low of $ 3,054 yesterday before settling at $ 3,113. Gold trades lower again today at $3085.
So, Why Is Bitcoin Holding Up?
Several factors appear to be working in Bitcoin’s favour. Firstly, the US Dollar has weakened considerably. Just 4 days into April, the USD trades -1.77% lower this month, following 3.1% losses in March. The USD trades around a 5-month low versus its major peers as investors fret over a US recession, shifting flows to the Euro as well as safer havens such as the Japanese yen and Swiss Franc.
Meanwhile, aggressive tariffs on China could also be favourable for BTC. China could respond by weakening the yuan, which could prompt Chinese investors to shift their investments away from the yuan towards other markets, such as Bitcoin and cryptocurrencies, to preserve their wealth.
US treasury yields have also fallen sharply following the tariff announcement, a sign that the Fed may be cutting interest rates sooner. The 2-year treasury yield slumped following the announcement, and the 10-year traded at its lowest level since October last year. The market expects the Fed to cut rates to support the economy from the negative impact of the tariffs. This, in turn, should help to improve liquidity.
While an outright rally in Bitcoin is looking unlikely, right now, any sense of a dovish pivot from the Fed could spur a jump higher.
Bitcoin Technical Analysis
BTC continues to trade below its falling trendline dating back to January and its 200 SMA at 86k. However, the downside is supported around 81k.
Buyers would need to rise above 86k, which is the confluence of the 200 SMA and falling trendline, to spur further gains towards 88.5k. A rise above here creates a higher high, changing the structure of the chart and bringing 90k into focus.
Should sellers break below support at 81k, the weekly low, 80k, and 76.6k come into focus.
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