Tariff pressures crypto markets until April

Global trade tensions and U.S. tariff policies are expected to weigh on cryptocurrency markets until at least early April, according to analysts.

Nicolai Sondergaard, a research analyst at Nansen, identified tariff concerns as “the biggest driver” impacting both crypto and traditional markets, with potential resolution offering a catalyst for market shifts.

Bitcoin’s (CRYPTO:BTC) price has declined over 17% since January 20, when U.S. President Donald Trump announced new import tariffs on Chinese goods.

Despite positive crypto-specific developments, Sondergaard emphasised that tariff-related uncertainty will persist until April 2, when reciprocal tariff rates are set to take effect.

“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,” he stated.

High interest rates from the Federal Reserve are compounding market pressures.

Sondergaard noted that investors are awaiting clearer signals of rate cuts, which may depend on economic data showing “proper ‘bad news’” to prompt Fed action.

Markets currently price an 85% chance of steady rates at the May 7 Federal Open Market Committee meeting, per CME Group’s FedWatch tool.

Iliya Kalchev, dispatch analyst at Nexo, highlighted the Fed’s view that inflation and recession risks tied to tariffs are temporary.

“Cooling inflation and stable economic conditions could further boost investor appetite, driving additional upside for Bitcoin and digital assets,” he said.

Key economic indicators—including Consumer Confidence, Q4 GDP, jobless claims, and next week’s PCE inflation data—will gauge the likelihood of future rate cuts, Kalchev added.

Analysts suggest tariff developments between April 2 and July could provide clarity, potentially lifting market sentiment.

Sondergaard framed the timeline as critical, noting that tariff adjustments may alleviate pressure on risk assets.

However, Treasury Secretary Scott Bessent’s earlier comments about possible delays in tariff activation have introduced uncertainty, complicating projections.

The interplay of geopolitical and monetary factors underscores crypto’s sensitivity to macroeconomic shifts.

While tariff resolution offers a potential catalyst, sustained Fed hawkishness and inflation data will remain pivotal in shaping market trajectories.

Investors are advised to monitor upcoming economic reports for signals of policy shifts or tariff adjustments.