Analyst Predicts Crypto Markets to Face Pressure from Trade Wars Until April
Cryptocurrency and traditional financial markets are expected to remain under pressure due to ongoing global trade war concerns until at least early April, according to Nicolai Sondergaard, a research analyst at Nansen.
Trade War Concerns Impacting Crypto Markets
Since U.S. President Donald Trump announced import tariffs on Chinese goods on January 20, Bitcoin (BTC) has experienced a price decline of over 17%. Despite positive developments within the crypto industry, global tariff fears continue to negatively impact market sentiment.
Sondergaard highlighted during Cointelegraph’s Chainreaction daily X show on March 21:
“I’m looking forward to seeing what happens with the tariffs from April 2nd onwards, maybe we’ll see some of them dropped but it depends if all countries can agree. That’s the biggest driver at this moment.”
President Trump’s reciprocal tariffs are scheduled to take effect on April 2, although earlier comments from Treasury Secretary Scott Bessent suggested a possible delay.
Federal Reserve Interest Rates Adding to Market Pressure
High interest rates set by the Federal Reserve are also contributing to reduced investor risk appetite. Sondergaard explained:
“We’re waiting for the Fed to see proper ‘bad news’ before they will really start cutting rates.”
According to CME Group’s FedWatch tool, markets currently predict an 85% chance that the Fed will maintain current interest rates at the next Federal Open Market Committee (FOMC) meeting on May 7.
Potential Positive Catalysts Ahead
Despite current pressures, analysts see potential positive catalysts emerging between April and July if tariff-related issues are resolved. Iliya Kalchev, dispatch analyst at Nexo, noted that stable economic conditions and cooling inflation could boost investor confidence:
“Cooling inflation and stable economic conditions could further boost investor appetite, driving additional upside for Bitcoin and digital assets.”
Kalchev advised investors to closely monitor upcoming economic data, including:
- Consumer Confidence reports
- Q4 GDP figures
- Jobless claims data
- PCE inflation release
Quick Summary
- Crypto markets pressured by global trade war concerns until at least early April.
- Bitcoin price down over 17% since tariff announcements.
- Federal Reserve’s high interest rates also dampening investor sentiment.
- Resolution of tariff issues and stable economic data could serve as positive market catalysts.
