By Chris Hollingworth 
Global trade war concerns are expected to continue exerting pressure on both cryptocurrency and traditional markets until at least the beginning of April, with the potential resolution serving as a significant market catalyst. Since US President Donald Trump announced import tariffs on Chinese goods on Jan. 20, Bitcoin’s price has dropped over 17%, marking a notable decline in the cryptocurrency market.
Despite several positive developments specific to the crypto space, the looming fears of global tariffs are likely to persist until April 2, as noted by Nicolai Sondergaard, a research analyst at Nansen. During Cointelegraph’s Chainreaction daily show on March 21, Sondergaard mentioned the importance of monitoring the tariff situation post-April 2, with the hope that some tariffs may be lifted if all countries reach a consensus, emphasizing this as a crucial market driver at present.
The uncertainty surrounding trade tensions may keep risk assets directionless until a resolution is reached, possibly between April 2 and July, providing a potential boost to the market sentiment. President Trump’s reciprocal tariff rates are scheduled to come into effect on April 2, despite earlier hints of a possible delay from Treasury Secretary Scott Bessent.
In addition to trade war concerns, high interest rates set by the Federal Reserve are also contributing to the market downturn. Sondergaard explained that until the Fed begins cutting rates, investor risk appetite may remain subdued. The current market sentiment suggests an 85% probability of the Fed maintaining interest rates during the upcoming FOMC meeting on May 7, according to the CME Group’s FedWatch tool.
Despite the prevailing uncertainties, the Federal Reserve remains optimistic about inflation and recession-related worries being temporary, especially in relation to tariffs. This positive outlook could potentially boost investor confidence, leading to increased interest in Bitcoin and digital assets, according to Iliya Kalchev, a dispatch analyst at Nexo digital asset investment platform.
Investors are advised to closely monitor key economic reports, such as Consumer Confidence, Q4 GDP, jobless claims, and the upcoming PCE inflation release, to gauge the likelihood of future rate cuts and assess the market trajectory. Overall, the resolution of trade tensions and the Federal Reserve’s stance on interest rates are expected to play crucial roles in shaping market dynamics in the coming months.
