Key Takeaways:
- U.S. President Donald Trump has initiated a 90-day pauses to the proposed reciprocal tariffs on imports from nearly 200 countries, except China. While there will be baseline tariff of 10% on all goods, Chinese imports will be tariffed at 125%.
- The global equities and crypto markets took the news positively, with Bitcoin (BTC) climbing to $83,000 while the S&P 500 Index was up 8%. Bitcoin futures briefly rose above the 5% neutral, but soon regressed due to traders growing pessimistic about the Federal Reserve bringing interest rates on the dollar below 4% by September.
- BTC options delta peaked at 12% following China’s retaliatory 34% tariff on U.S. imports, but quickly returned to the neutral 3% after Trump pauses tariffs and announced sweeping new levies on Chinese goods.
- Bitcoin’s price is targeting a breakout above the upper trendline at $83,000, which could trigger a move towards $100,000 by June. Critical support zone for the apex cryptocurrency lies between $65,000 and $71,000, making the latest rebound crucial.
The equities and crypto markets made a dramatic comeback on April 9 after U.S. President Donald Trump announced a 90-day pauses on the reciprocal tariffs for non-retaliating countries, except China. Bitcoin (BTC) responded to the bullish news by surging 5% in less than an hour to reclaim the $83,000 level for the first time since April 6, while the S&P 500 Index was up 8%.
Bitcoin Surges As Trump Pauses Tariffs On All Countries Except China
Hours after the proposed tariffs took effect on Wednesday, the President wrote in a Truth Social post that he has authorized a three-month pause on some charges and substantially lowered reciprocal tariffs during this period to 10%. However, the only exception in this case is China, with Trump announcing a new set of levies on imports from the country, bringing the total amount to 125%, effective immediately.
Trump said that China had shown a “lack of respect” to the “World’s Markets”, which is the reason why he was raising the tariff charged to the country. He also noted that over 75 countries had engaged in commerce negotiations.
Bitcoin futures premium briefly rose above the neutral 5% threshold. However, it failed to sustain its momentum as investors are skeptical about the U.S. Federal Reserve lowering interest rates throughout the year. Nevertheless, there is growing confidence among Bitcoin bulls as attempts made by bears to push prices below $76,000 failed.
Traders Raise Doubts About The Federal Reserve Reducing Dollar Interest Rates
Traders were hesitant to go big on Bitcoin partly due to the release of minutes from the Federal Reserve Committee (FOMC) meeting held on March 18 and 19, which highlighted concerns about stagflation. The CME FEDWatch Tool data suggests that the probability of the Federal Reserve bringing interest rates below 4% has reduced to 69.7% from 97.6% earlier this month.
Traders are also worried about the implications of a weakened 10-year U.S. Treasury yield, reflected by the reduced confidence in the federal government’s ability to bring its growing debt under control. In an interview with Yahoo Finance, economist Peter Boockvar said that investors fear foreigners will continue to reduce their exposure to U.S. Treasuries.
Typically, a rise in bing yields indicates that buyers are demanding higher returns from the federal government, which results in the cost of rolling over debt increrasing, potentially creating a negative cycle that weakens the U.S dollar. This macroeconomic uncertainty has also been reflected in Bitcoin options markets.
When traders are anticipating a market correction, put options (sell) trade at a premium, which pushes the 25% delta skew (put-call) metric above 6%. On the other hand, during a bullish run, this indicator usually drops below -6%.
Bitcoin options delta peaked at 12% on April 9 after China retaliated with a 34% tariff on imports from the U.S.. However, this trend reversed completely following Trump pauses tariffs, returning the indicator to a neutral 3%. This shift indicates that the options markets are now pricing equal probabilities for upward and downward price movements, thereby marking the end of a bearish phase that began on March 29.
Bitcoin Price Must Break Past $83,000 For Any Hopes of Reclaiming $100,000 Valuation
As of April 9, Bitcoin’s price was eyeing a breakout above its upper trendline at around $83,000 after confining within the falling wedge range on the chart, and if it manages to move ahead, then the upside target could be repositioned to around $100,000 by June.
Conversely, a rejection from the upper trendline could increase the likelihood of BTC retreating deeper within the wedge pattern, sliding toward $71,000. If the price experiences a breakout after retesting the $71,000 level, then the most likely upper-level target for BTC could be $91,500.
Bitcoin’s rebound appeared right before it tested a critical support zone between $65,000 and $71,000, reinforcing the apex cryptocurrency’s bullish outlook toward the coveted $100,000 mark. The $65,000 valuation represents the true market mean price, while the $71,000 level is the active realized price.
However, breaking below the $65,000-$71,000 range could diminish Bitcoin’s chances of retesting $100,000 anytime soon. Such declines would also lead to the price moving below its 50-week exponential moving average. The 50-week EMA near $77,760 has acted as a dynamic support for Bitcoin during bull markets and a resistance during bear markets, making it a crucial trend-defining level.
If Bitcoin loses this support, then the price could see a steeper pullback toward the 200-week EMA at around $50,000. Previously, breakdowns below the 50-week EMA have resulted in similar declines, namely during the 2021-2022 and 2019-2020 bear cycles. However, a rebound will raise the likelihood of Bitcoin reclaiming $100,000.
At the time of writing, Bitcoin (BTC) is trading at $82,045 – up 5.85% in the last 24 hours.