
How trade disputes and interest rate policy are affecting crypto prices and what turning points could be coming in April.
Developments in the financial markets, both in the area of ​​cryptocurrencies and traditional assets, are currently influenced by global trade wars. These tensions could last until at least the beginning of April and are already having a significant impact on investors’ trading behavior.
Insight into the Market Impact
The uncertainty surrounding trade tariffs introduced by US President Donald Trump has caused the price of Bitcoin (BTC) to fall by over 17% since their announcement on January 20, the day of his inauguration. Despite positive progress in the cryptocurrency-related sector, markets are exhibiting a reactive attitude towards international trade conflicts, as Nicolai Sondergaard, research analyst at Nansen, explains.
The Timing of Changes
Sondergaard spoke during a live broadcast of Cointelegraph’s Chainreaction on March 21, highlighting: “I’m curious to see what will happen with the tariffs starting April 2nd. Perhaps some of them will be dropped, but that depends on whether all countries can reach an agreement. That’s the most important factor right now.”
A Look Back at Interest Rate Policy
In addition to trade tariffs, high interest rates are having a negative impact on investors’ risk aversion. Sondergaard further explained, “We are waiting for the Fed to see bad news at the right time before it begins a loose interest rate policy.” According to the latest estimates from CME Group’s FedWatch tool, markets expect an 85% probability that the Federal Reserve will keep interest rates steady at its next meeting on May 7.
Market Development in Focus
Analysts believe that the period between April 2 and July could be a positive catalyst for the markets if trade issues are addressed and resolved. Sondergaard pointed out that “risk investing may lose direction until concerns about trade tariffs are addressed.”
Key Economic Data as an Indicator
The Federal Reserve has signaled that concerns about inflation and potentially a recession are temporary, which, according to Iliya Kalchev, dispatch analyst at digital investment platform Nexo, offers a glimmer of hope for investors. “Markets may now anticipate potential economic data with greater confidence,” Kalchev said. “Cooling inflation and stable economic conditions could further increase investors’ risk appetite.”
Outlook for the Near Future
Investors should pay particular attention to key reports, such as consumer confidence, fourth-quarter GDP, jobless claims, and the crucial PCE inflation release next week, to assess the potential for future interest rate cuts.
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