"Trump's tariff threats and crackdown, extreme turmoil in the financial markets, can Bitcoin hold its ground?!"

"Decision-making requires logic, reason, and common sense, not emotions. ——Founder of Bridgewater Associates: Ray Dalio – “Principles”

The VIX panic index has been above 45 for four consecutive days, a phenomenon that last occurred in October 2008 and March 2020. Such a level of market volatility has caused significant damage to the global financial markets.

With the suspension of tariff adjustments and waning concerns about the worst-case scenario, the U.S. stock market has rebounded from the brink. Since last Friday’s close, the S&P 500 index has ultimately risen by 5.8%.

Currently, the key resistance levels faced by the index include the 50-day and 200-day moving averages, as well as the resistance area at 5,600 points. Once these resistances are successfully broken, the bears will face significant pressure.

Study the relationship between the Nasdaq 100 Index and key moving averages: it can be found that these moving averages may act as resistance levels in the upcoming re-break test - similar to how they act as support levels during a bull market.

The Bitcoin price chart is the same! Breaking through the key moving average and maintaining a high position indicates a bullish trend; breaking below the key moving average and maintaining a low position indicates a bearish trend. Currently, Bitcoin may face the risk of being rejected at key moving average levels again. This situation has occurred multiple times since February 2025, which contrasts sharply with the bullish trend of the fourth quarter of 2024.

Last week, due to the escalation of the tariff trade war, the stock market was hindered, and the upward space for Bitcoin was limited! The Bitcoin spot ETF has also faced a strong impact, with net outflows exceeding $708 million. The Bitcoin spot ETF under BlackRock, IBIT, experienced the largest net outflow, losing $342 million. The bull market cycle of Bitcoin has never occurred by chance. When market liquidity dries up and growth assets stagnate, the upward momentum of Bitcoin will also slow down.

The University of Michigan Consumer Sentiment Index has dropped significantly! The index has been continuously declining since the beginning of the year, now falling back to the levels of 2022, showing the impact of high inflation and its fears on consumer confidence. Although the consumer price index has not shown signs of stopping, the low sentiment may signal weakening future demand and slowing economic growth, which in turn could affect corporate profits and stock market performance. In addition, this change in market sentiment has an important impact on Bitcoin, as a decline in the stock market in a risk-averse environment usually drags down Bitcoin’s performance.

Trump’s tariff hikes are far from over! After 90 days, he may reinstate some or all of the suspended tariffs, similar to the measures he took earlier this year against Canada and Mexico. Last week, U.S. President Trump claimed that the currently suspended national-level tariffs are “reciprocal,” but this statement is not true. After experiencing two rounds of retaliatory tariffs, U.S. tariffs on China increased by 91% again after being announced on April 2, with tariffs on most goods reaching as high as 145%. This situation signifies the end of most direct trade between the world’s two largest economies, completely severing the majority of economic ties between the U.S. and China. This is undoubtedly the largest negative impact on global supply chains since the early days of the pandemic. The current situation has led many countries and investors to sell off large amounts of U.S. bonds and other assets. When the market experiences such a sell-off, the interest rates (or “yields”) on U.S. bonds tend to rise. Since April 4, the yield on the 10-year U.S. Treasury has risen from 4% to about 4.5%. This change not only reflects the tense mood of the market but also has far-reaching effects on investors’ decisions.

As many issues remain unresolved, the risk of a recession in the U.S. economy continues to rise, making it difficult to manage the situation. In such a market environment, we must always stay vigilant and keep in mind the potential risks of bull market traps and bear market rebounds, in order not to get overly involved in these highly volatile markets. Rational analysis and cautious decision-making will be key to coping with the current uncertainties!

Note: All content represents the author’s personal views only and should not be construed as investment advice, nor should it be interpreted in any way as tax, accounting, legal, business, financial, or regulatory advice. You should seek independent legal and financial advice, including advice regarding tax consequences, before making any investment decisions.

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