5 min read- BTC falls towards 85k, testing the 200 SMA
- US core PCE rose to 2.8% & consumer spending was weak
- Risk assets fall ahead of April 2 & Gold hits a record high
- SEC nominee Aitkins sees crypto regulation as a top priority
Bitcoin is falling on Friday amid a risk-off mood in global financial markets, following hotter-than-forecast US inflation and ahead of US reciprocal tariffs next week.
The largest cryptocurrency is falling over 2% and is testing the key 200 simple moving average support. The move lower sparked a long liquidation event. Over the past 24 hours, $335.2 million in long Bitcoin positions have been wiped out.
It is not just Bitcoin in the red; Ethereum is trading over 5% lower, as are Solana and Dogecoin. Other risk assets, such as US stocks, are also falling on Friday. The Nasdaq 100 trades 1.8% lower at the time of writing.
Data today showed that US inflation was hotter than expected in February. The core PCE, the Fed’s preferred gauge for inflation, rose to 2.8% annually, up from 2.5% in the previous month. On a monthly basis, inflation rose 0.4%, ahead of the estimated 0.3%. At the same time, consumer spending rose just 0.1% after falling in January by the most in almost four years.
The report highlights sticky inflation at a time when President Trump is expected to impose additional trade tariffs, which could further fuel price pressures. Trump’s aggressive trade policies have hit sentiment among businesses and consumers, raising concerns that the economy is heading into stagflation – high inflation and low growth.
Risk assets fall ahead of April 2 & Gold hits a record high
Bitcoin is trading like a risk asset. As of March 28, the weekly correlation between BTC and US stocks was 0.88. While risk assets, such as cryptocurrencies and US equities, are falling, safe-haven gold has risen to fresh all-time highs, climbing towards $3,100.
The mood remains cautious ahead of April 2, when Trump is set to announce reciprocal trade tariffs. At the start of the week, reports that these reciprocal trade tariffs could be less severe than initially feared helped lift Bitcoin and risk assets higher. However, these gains were short-lived and were erased after Trump announced 25% tariffs on all autos imported into the US.
While some view the April 2 tariffs as a possible end to uncertainty, this may not necessarily be the case. Crypto and, more broadly, risk assets could continue to face ongoing challenges as trade wars ramp up and uncertainties and inflation concerns rise, fueling a risk-off environment.
Bitcoin is likely to be heavily influenced by headlines, and volatility is also expected to be high. Bitcoin would need to reclaim 90,000 to secure a more neutral positioning.
Paul Aitkins sees crypto regulation a top priority
While Trump’s trade tariff headlines are hurting sentiment near term, the improving regulatory environment could pave the way for a brighter, longer-term picture for crypto.
Paul Aitkins, President Trump’s nominee for SEC chair, in a speech to the US Senate Banking Committee, has pledged to create a rational and coherent crypto regulatory framework. He noted in a statement that the ambiguous and non-existent regulations in crypto created uncertainty and stifled innovation
Author
Risk DisclaimerThe financial products offered by the Company are complex and come with a high risk of losing money rapidly due to leverage. These products may not be suitable for all investors. Before engaging, you should consider whether you understand how these leveraged products work and whether you can afford the high risk of losing your money.
The Company does not accept clients from the Restricted Jurisdictions as indicated in our website/ T&C. Some services or products may not be available in your jurisdiction.
The applicable legal entity and its respective products and services depend on the client’s country of residence and the entity with which the client has established a contractual relationship during registration.
