- Bitcoin rebounds after a sharp decline caused by retaliatory tariffs, following the announcement of a 90-day tariff pause.
- Despite the recovery, investor sentiment remains weak, and resistance levels loom, suggesting the market isn’t out of the woods yet.
The crypto market’s been on a wild ride this week. Things took a hit after some retaliatory tariffs were announced, but then Bitcoin bounced back when President Trump said there’d be a 90-day pause on those tariffs. It gave everyone a bit of breathing room, but the big question is, was that just a quick break from the chaos, or are we actually on the road to a real recovery?
Digging Deeper into the Details
Earlier this week, the crypto market was rocked by growing trade tensions. China and the EU hit back with new tariffs, and that sent Bitcoin sliding from around $84K down to a five-month low near $74K. It was a pretty clear reminder that global politics can shake up the crypto world just as much as traditional markets.
The downturn, however, was short-lived. On April 9, President Trump’s announcement of a 90-day tariff pause injected a dose of optimism into the market. The tariff pause applies a 10% tariff on all countries except China, which faces a significantly higher tariff of 125%. This policy shift played a crucial role in restoring investor confidence, leading to a major recovery of the value Bitcoin had lost.
Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately. At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable,
Trump stated.
Technical analysis reveals that Bitcoin’s price bounce was supported by its 365-day moving average (MA), currently positioned around $76.1K. This technical indicator has historically served as a critical support level. A sustained drop below the 365-day MA could signal the commencement of a prolonged bear market, reminiscent of market conditions observed in August 2024, July 2021, and December 2021.
Despite the technical rebound and the positive reaction to the tariff pause, market sentiment remains notably pessimistic. CryptoQuant’s Bull Score Index, a gauge of overall investor sentiment, currently registers a concerningly low reading of 10, its lowest since November 2022. This depressed score reflects a prevailing sense of caution among investors, indicating a low probability of an enduring rally.
CryptoQuant suggests that if the Bull Score Index continues to linger below the 40 mark, market conditions could closely resemble those seen in previous bearish cycles. Looking ahead, if Bitcoin manages to sustain its upward trajectory, it may encounter resistance at near-term price levels around $84K, and subsequently at the $96K zone. These resistance levels have historically acted as barriers within this trading cycle and could potentially impede further progress.
While the tariff pause has provided a temporary breather for the crypto market, caution remains the prevailing sentiment. Investors are eagerly awaiting more robust and sustained bullish signals before fully committing to a long-term recovery narrative.
The market is tentatively optimistic, but it’s not entirely out of the woods yet. Today, Bitcoin is trading at $82,155, up 0.5% in the last 24 hours with a trading volume of $47.6B.