Bitcoin falls 2.19% after Trump tariffs

Trump's measure strengthens the dollar and weakens cryptocurrencies, while investors bet that the FED will maintain high rates.

The price of Bitcoin fell 2.19% this Friday, closing at USD 102,429, after the confirmation of the tariffs imposed by the Donald Trump government on Canada, Mexico and China. The measure strengthened the dollar, while the cryptocurrency market faced pressure. In addition, 82% of federal funds investors anticipate that the Federal Reserve (FED) will keep interest rates unchanged at its next meeting. This could keep the dollar in an upward trend and limit the growth of cryptocurrencies.

Despite the drop, Bitcoin managed to stay above its 25-period moving average, suggesting bullish sentiment in the short term. / TradingView

Trump tariffs: A blow to global trade and cryptocurrencies

The President of the United States, Donald Trump, confirmed this Friday the implementation of tariffs on Canada, Mexico and China. This is a measure that seeks to exert commercial pressure on these countries. In addition, he announced the possibility of applying additional tariffs to key products such as chips, drugs, steel, aluminum and copper. This trade policy creates uncertainty in global markets, including the cryptocurrency market.

Tariffs are considered an inflationary factor, as they increase the costs of imported and exported goods. A resurgence of inflation could force the FED to keep interest rates high or even increase them. This would further strengthen the dollar and weaken assets such as Bitcoin.

The dollar strengthens, cryptocurrencies fall

The DXY index, which measures the value of the dollar against a basket of currencies, registered an increase of 0.29%, reaching 108.5 points. This upward trend has continued since October 5, 2024, when Donald Trump won the presidential election. The strengthening of the dollar is a key factor in the fall in the price of Bitcoin, which lost 2.19% on the day, closing at USD 102,429.

Despite the drop, Bitcoin managed to stay above its 25-period moving average, suggesting bullish sentiment in the short term. However, trading volume on platforms like Binance was below the 25-day average, indicating a quiet day for the crypto market.

The FED and interest rates: What do investors expect?

In the federal funds futures market, 82% of participants are betting that the FED will keep interest rates unchanged at its next meeting on March 19. This means that rates could remain at 4.50%, a level that discourages investment in risky assets like cryptocurrencies.

The FED's restrictive monetary policies, combined with the strengthening of the dollar, created a challenging scenario for Bitcoin and other cryptocurrencies. Although the world's leading cryptocurrency is resisting the onslaught of political uncertainty, its short-term performance will largely depend on the decisions of the FED and the evolution of US trade policy.

As the dollar continues its upward trend and Trump's tariffs generate uncertainty in global markets, Bitcoin and cryptocurrencies face a complex scenario. Although the leading cryptocurrency shows resilience, its immediate future will be influenced by the decisions of the FED and international trade tensions. Crypto investors will have to keep an eye on these factors to navigate an increasingly volatile market.

Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial, investment or trading advice. Please do your research and consult with a professional before making financial decisions.