Yesterday, the price of Bitcoin (BTC) seemed to be gearing up for a bull run.
In reality, this rally had already started on Monday, when from 82,000$ it had returned to almost 84,000$.
The rally had continued on Tuesday, with a climb above 85,000$, and yesterday it seemed to be the right moment to start again.
The end of the Bitcoin (BTC) bull run
Yesterday, the announcement from Donald Trump regarding the new tariffs applied by the USA on goods imported from abroad was anticipated.
The announcement was expected after the close of the U.S. stock market session, and so it was.
Yesterday’s session was characterized by slight optimism, because the markets were probably expecting contained measures.
Note that since Monday the markets had not moved much, probably because they were waiting for yesterday’s announcement.
Furthermore, just yesterday at a certain point the Dollar Index started to decline.
While on one hand this should actually have been interpreted as a bad sign for the markets, on the other hand it had a positive effect on Bitcoin.
The price of BTC yesterday started the day at $85,000, and when the Dollar Index fell from 104.2 points to 103.7 points, it rose to $87,000.
The climb continued until shortly after the close of the USA stock session, when it briefly surpassed $88,000. Then came the announcement from Trump.
The collapse of BTC after the announcement of Trump’s tariffs
The announcement by Trump in the end was much worse than expected.
The USA stock exchanges were already closed, but the futures immediately indicated large losses coming.
The Asian stock markets reopened after a few hours with heavy losses.
It was not a true collapse, but it is not possible to exclude that it is the beginning of a collapse. In fact, the markets evidently did not expect an attack of such enormous magnitude on global trade, perhaps because they believed (and hoped) that Trump did not have so much courage.
And instead, the USA president announced the start of a true commercial war worldwide, with a measure of historic significance that could cause a collapse in global trade, and consequently the production of wealth on a global level.
However, it is also possible that this is merely a tactical move to then proceed with further negotiations in order to negotiate from a position of strength. Therefore, not only was last night’s event not a true bull market crash, but it might also not be followed by a true bear market crash in the days to come.
The reaction of Bitcoin
The reaction of the Bitcoin price to all this appears mixed.
In fact, the decline of the Dollar Index that began yesterday well before Trump’s announcement then continued until it dropped below 103 points. The current level had not been seen since October, that is, before Trump won the elections.
Note that most likely one of the objectives of Trump‘s policy was precisely to weaken the US dollar to favor their exports.
The price of Bitcoin in the medium/long term tends to be inversely correlated to the Dollar Index, and thus has partially benefited from this dynamic.
To tell the truth, at first, after Trump‘s announcement, it dropped within four hours from 88,000$ to 82,000$, effectively returning to Monday’s levels. However, in a second moment, despite the suffering of the Asian markets, it took advantage of a small rebound in the Chinese and Japanese stock exchanges to climb back above 83,000$.
For all intents and purposes, there was no crash in the price of BTC last night, so much so that the current value is perfectly in line not only with that of the beginning of the week but also with that of the beginning of March. Simply put, yesterday the small unjustified excess of enthusiasm that had spread in the markets suddenly dissipated.
The forecasts and the possible new bull of BTC
It must also be said that there are negative forecasts for the medium-short term circulating.
April, just like March, might turn out to be a month not particularly good for Bitcoin, even though the sharp drop in the Dollar Index could help significantly to contain the decline.
So on one side there are strong downward pressures, but on the other, there is starting to be strong support that is preventing the price of BTC from crashing below $80,000.
Despite this, a return below $76,000 remains absolutely possible during this month, even if at this moment the risk of a return below $70,000 seems to have receded a bit.
The current situation in the mercati finanziari however does not seem like it can last long, so much so that the hypothesis is beginning to circulate that by the end of the month the strategia politica di Trump might start to change.
Now that he has positioned himself from a position of strength to negotiate, he could use the reduction of the tariffs just imposed as a bargaining chip to obtain something from the counterparts, and if this were to happen, in the end, the problem could partially subside, or even eventually end up exhausting its negative impact on the markets.
