Bitcoin experienced a notable decline of over 2% on Sunday, retreating to approximately $83,482 during Asian trading hours. This downturn followed renewed concerns over U.S. trade policy toward China after conflicting statements regarding tariffs from former President Donald Trump’s administration.
Tariff Uncertainty Shakes Investor Confidence
Initial signals from Trump suggested the possibility of temporary exemptions on certain Chinese-manufactured goods—such as smartphones and semiconductors. However, those statements were later reversed, reinforcing the stance that all Chinese imports would continue to face stringent tariffs. This inconsistency contributed to rising geopolitical tensions and unease about inflation.
Crypto and Market Reactions
Besides Bitcoin, Ethereum sank below the crucial $1,600 level, and altcoins showed mixed reactions. Interestingly, traditional equities took the uncertainty in stride, with the Nasdaq and S&P 500 futures posting minor gains, hinting at a short-term divergence in risk sentiment between crypto and stock markets.
Interest Rates and Inflation Outlook
Earlier optimism around cooling inflation had buttressed Bitcoin prices last week. However, with escalating tariff threats, traders are bracing for potential inflationary repercussions. This development may prompt the Federal Reserve to delay interest rate cuts, which some experts now forecast won’t arrive until at least June.
Key Support Levels and Trading Risks
The cryptocurrency market now faces a critical juncture. If Bitcoin falls below the $81,000 support level, it could spark a broader sell-off, especially among traders with high leverage. This increases the risk of amplified downside volatility in an already fragile trading environment.
For more information, read the full article on Decrypt.
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