The price of Bitcoin remained stable above $80,000 as investors in cryptocurrency and stocks adopted a cautious stance ahead of Donald Trump’s upcoming Liberation Day tariff speech.
Currently, Bitcoin (BTC) is trading at $84,500, reflecting a 10% increase since its March low. In contrast, U.S. stock market futures are trending downwards, with the Dow Jones and Nasdaq 100 both declining by over 300 points.
It’s Liberation Day
The primary driver for Bitcoin, altcoins, and the stock market will be Trump’s Liberation Day address at the Rose Garden, where he is anticipated to announce reciprocal tariffs affecting most nations, including the European Union, China, India, and Japan.
Experts caution that these tariffs could trigger a significant recession this year, with institutions like Goldman Sachs and PIMCO raising their recession probabilities to 35%. Such a downturn may stem from reduced business investments and diminishing consumer spending.
While one might expect Bitcoin’s price to decline following the tariff announcement, the reality could be different, with BTC and the stock market potentially rebounding.
There are three key reasons supporting this perspective. Firstly, the market has likely already penalized the tariffs, as Trump has been voicing them for weeks. Therefore, upon the official announcement, the market might engage in a “buy the fact” reaction.
A notable instance is how Bitcoin’s price soared to an all-time high before Trump’s inauguration, only to decrease once he assumed office.
Secondly, Bitcoin has historically managed to overcome significant obstacles. It not only endured but also flourished during the COVID-19 pandemic and the challenging regulatory landscape under SEC Chair Gary Gensler. In a recent email, Gadi Chait, an investment manager, remarked on the prevailing apprehension:
“These fluctuations might unsettle speculators, but in the end, they are just background noise. Bitcoin has consistently been a long-term investment; its true value comes from its sovereign nature, decentralization, and limited supply, not from short-lived volatility. We’ve faced these conditions before and will likely face them again, but Bitcoin’s long-term path remains clear.”
Lastly, a recession could potentially benefit Bitcoin and similar risk assets, as it might encourage the Federal Reserve to lower interest rates and resume quantitative easing measures.
Strong Technical Indicators for Bitcoin
The weekly charts indicate that Bitcoin continues to display robust technical indicators. It has established an ascending channel and is currently positioned near its lower boundary. The last instance it reached this point was in August of the previous year, after which it surged to a new all-time high.
Additionally, Bitcoin has stayed above the 50-week moving average, signaling bullish momentum. Consequently, BTC is likely to rebound and may approach $100,000 in the coming weeks. However, a drop below the channel’s lower boundary would invalidate this optimistic outlook.