5 min readBitcoin is hovering around 84,000 on Wednesday, having recovered from a low of 81.7k earlier in the week. The market mood remains cautious as traders sit on the sidelines ahead of President Trump’s liberation day tariff announcements.
Bitcoin has consolidated above 80k over the past two weeks, and investors are looking to today’s trade tariff announcement for a potential catalyst for their next move.
At 20:00 GMT President Trump is set to announce reciprocal trade tariffs for its global trading partners. Details have been scarce, but Trump dashed hopes of less severe tariffs at the weekend, raising the risk of the US fighting trade wars on multiple fronts.
What to expect from Trump’s tariffs?
The market is currently in a wait-and-see mode, awaiting greater clarity. According to Goldman Sachs, trade tariffs could be in the region of 9%-15%. On the one hand, less severe tariffs could boost sentiment, fueling a risk-on rally; more aggressive tariffs could spark a selloff in risk assets, including Bitcoin.
According to Bloomberg, maximum aggressive tariffs of around 28% could result in a 4% hit to the US GDP and raise prices by nearly 2.5% over a two- to three-year period. Slower growth and rising inflation – stagflation is a concern and could hit demand for risk assets, such as Bitcoin, further.
Despite Bitcoin falling 11% in Q1 and dropping over 20% from its record high, aggressive trade tariffs could send BTC quickly back below 80k, toward 76.7k, the 2025 low. The fact that the rump administration hasn’t been actively supporting cryptocurrencies recently doesn’t help matters.
How might less severe tariffs affect Bitcoin?
Meanwhile, less severe tariffs could have a more positive impact on risk assets, including US stocks and Bitcoin. Under this scenario, the US economy would still likely slow, but a recession would be less likely. The Fed would also start to cut interest rates, which is often supportive of risk assets unless a severe recession happens.
If the Trump administration clarifies its stance on trade and the Fed hints at a sooner rate cut, this could help push Bitcoin back above $88,000, the weekly high, and $90,000.
Volatility ahead and whales accumulate
While the market is quiet in early trade, volatility is expected to ramp up around the announcement. Liquidations have been low, with $266 million liquidated over the past 24 hours. $161 million in long liquidations and $104.9 million in shorts. Meanwhile, the Fear and Greed index remains in Fear territory.
On-chain data from CryptoQuant indicates that Bitcoin whales are continuing to accumulate while smaller investors are panic-selling. Whale accumulation could reduce the chances of the price collapsing below 80k to 77k due to macroeconomic uncertainty. However, that could depend on how aggressive Trump’s trade tariffs are.
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