Despite Bitcoin’s 2.2 % increase on April 1, BTC (BTC) has not traded more than 89,000 since March 7. Although the recent price weakness is often linked to the growing US -led global trade war, many factors were weighing on investors’ sentiments even before President Donald Trump announced prices.
Some market participants have claimed that the strategy has been the main reason for the strategy since the purchase of $ 5.25 billion, which is mainly due to the BTC, more than 000 80,000 support. But, regardless of who is buying, the fact is that on January 21, President Trump was already showing Bitcoin before announcing 10 % of Chinese import taxes.
Gold/USD (left) vs. Bitcoin/US $ (right). Source: Trading View / Quentel Graph
Exactly 30 days after the trade war began, the S&P 500 index targeted the height of all time, while Bitcoin repeatedly failed to hold more than 100,000 in the last three months. Although the trade war certainly affected the hunger for investors, strong evidence suggests that President Trump began the weakness of Bitcoin before taking office on January 20.
Spot Bit Coin Etfs Influys, Strategic BitCoin Reserve Expectations and Inflation Trends
Another data point that weakens relationships with revenue is the Spot Bit Coin Exchange Trade Funds (ETFS), which saw a net arrival of $ 75 2.75 billion in three weeks after January 21. As of February 18, the United States announced plans to impose imports from Canada and Mexico, while the European Union and China had already retired. The summary is that despite the increase in trade war, BitCoin’s institutional demand remained.
After January 21, a part of the frustration of Bitcoin traders is excessive expectations regarding President Trump’s promise to President Trump’s election campaign of the “Strategic National Bitcoin Storage” at the Bitcoin Conference in July 2024. When investors became anxious, they faced frustration when the original executive order was issued on March 6.
An important factor behind Bitcoin’s struggle to break more than 89,000 is inflation, which reflects the relatively successful Successful strategy of the global central banks. In February, US personal consumption costs (PCE) price index increased by 2.5 % year by year, while in March the Eurozone consumer price index (CPI) increased by 2.2 %.
Investors become more risky after the job of a weakening market data
In the second half of 2022, the benefits of bitcoin increase over 5 % due to inflation, suggesting that business and family turn to cryptocurrency as a hedge against monetary debate. However, if inflation is relatively controlol in 2025, low interest rate property will be more directly entitled to Bitcoin in favor of non -real estate property and stock markets, as the cost of financial support promotes low these sectors.
US CPI inflation (left) vs. 2 -year -old Treasury Production (right). Source: Trading View
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The demand for traders of risk assets, including Bitcoin, has also been reduced in the weak job market. In February, the US Labor Department reported the launch of a job near the lowest level in four years. Similarly, the US 2 -year -old Treasury production reached the lowest level in six months, with investors accepted a slight 3.88 % return to protect government -backed equipment. This figure recommends a growing choice to avoid risk, which is unpleasant for bitcoin.
Ultimately, BitCoin price weakness is created by investors’ unrealistic expectations of BTC acquisition through US Treasury, decreasing inflation supporting potential interest rates, and converting investors into short -term government bonds. Although the trade war has had negative effects, BitCoin was already showing signs of weakness before it began.
This article is for general information purposes and is not intended and should not be taken as legal or investment advice. The views, ideas and opinions expressed here are alone by the author and do not necessarily reflect or represent the Quantal Graf’s ideas and opinions.
