Despite the 2.2% profit of Bitcoin on April 1, BTC (BTC) has not been traded more than $ 89,000 since March 7. Recent price weaknesses are often associated with the US -led global trade war, but some of the factors of investor sentiment have already been focused on investors.
Some market participants argued that the purchase of Bitcoin purchases worth $ 5.5 billion in strategy after February is the main reason for BTC’s $ 80,000. However, regardless of who purchased, the reality is that Bitcoin is already rising before President Trump announced 10%of China’s import tariffs on January 21.
Friday/USD (left) vs. bitcoin/USD (right). Source: TradingView / COINTELEGRAPH
The S & P 500 index recorded an all -time high on February 19, exactly 30 days after the trade war began, and Bitcoin has not repeated $ 100,000 over the last three months. The trade war certainly affected investor risk appetite, but strong evidence that Bitcoin’s price weakness began before President Trump took office on January 20.
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Another data point, which weakens the relationship with tariffs, announced plans to impose tariffs on Canada and Mexico imports by February 18 until February 18, while the European Union and China have already retaliated for three weeks. In essence, institutional demand for Bitcoin continued even if the trade war expanded.
Some of the disappointment of Bitcoin Traders since January 21 comes from excessive expectations surrounding President Trump’s promise of “strategic national bitcoin reserve” mentioned by Bitcoin Conference in July 2024. Investors were frustrated when the actual administrative order was issued on March 6th, as the patience was eliminated.
The key element of the struggle to exceed Bitcoin’s $ 89,000 is inflation trend, reflecting a relatively successful strategy of the Global Central Bank. In February, the US Personal Consumption Loaditures (CPI) increased 2.5% year -on -year, while the Eurozone Consumer Price Index (CPI) increased 2.2% in March.
Investors conveys more risk avoidance depending on weak job search market data.
In the second half of 2022, Bitcoin’s profits suggest that inflation, which has soared more than 5%, has changed into a cryptocurrency as a hedge to monetary destruction. However, if inflation is relatively controlled in 2025, if interest rates reduce real estate costs, financial costs decrease, reducing financial costs, and the relevant sector increases.
US CPI inflation (left) vs. US two -year financial yield (right). Source: TradingView
relevant: Coinbase sees the worst after the FTX collapse in the industrial lineage.
The weakening job market also weakens the demand for traders for risk assets, including Bitcoin. In February, the US Labor Department reported a job opening near four years. Similarly, the yield of the US two -year Treasury fell to the lowest level of six months, and investors have received 3.88% of the government’s safety. This data suggests an increase in choice for Bitcoin’s risk avoidance.
Ultimately, Bitcoin’s price weakness comes from a macro economic environment that avoids risks as inflation decreases in the US Treasury’s acquisition of BTC, reducing inflation that supports potential interest rate cuts, and investors switch to short -term government bonds. The trade war had a negative impact, but Bitcoin was already showing signs of weakness before starting.
This article is for general information purposes and should not be considered legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.