Analyst: Crypto Markets to Face Pressure from Trade Wars Until April

Global tariff concerns are "the primary influence" on both cryptocurrency and traditional financial markets, according to analysts at Nansen.

Both cryptocurrency and traditional markets are expected to face pressure from global trade war concerns until early April, though a potential resolution could serve as the next major market catalyst.

Bitcoin (BTC) has dropped over 17% since U.S. President Donald Trump announced import tariffs on Chinese goods on Jan. 20, his first day in office.

Despite various positive developments within the crypto sector, ongoing global tariff uncertainties will likely weigh on the markets until at least April 2, according to Nicolai Sondergaard, a research analyst at Nansen.

The research analyst stated during a market discussion on March 21:

"I'm eager to see what happens with the tariffs after April 2. There’s a chance some might be lifted, but it all depends on whether all countries can reach an agreement. Right now, this is the biggest market driver."

The analyst noted that risk assets might remain directionless until tariff-related uncertainties are addressed, which could happen between April 2 and July, potentially serving as a positive catalyst for the market.

President Trump’s reciprocal tariff rates are scheduled to take effect on April 2, despite previous remarks from Treasury Secretary Scott Bessent suggesting a possible delay in their implementation.

The Federal Reserve’s high interest rates are also weighing on market sentiment, limiting investors’ risk appetite until rate cuts eventually begin, explained Sondergaard.

“We’re waiting for the Fed to see proper ‘bad news’ before they will really start cutting rates,” he added.

Current market expectations suggest an 85% probability that the Federal Reserve will maintain interest rates at their current level during the upcoming Federal Open Market Committee (FOMC) meeting on May 7, according to the latest estimates from the CME Group’s FedWatch tool.

The Federal Reserve suggests that concerns related to inflation and recession, particularly those linked to tariffs, are temporary, which could be a positive signal for investors, according to Iliya Kalchev, a dispatch analyst at Nexo's digital asset investment platform.

"Markets may now anticipate upcoming economic data with greater confidence," Kalchev noted, emphasizing that cooling inflation and stable economic conditions could enhance investor sentiment, potentially driving further gains for Bitcoin and other digital assets.

The analyst highlighted key economic reports to watch, including Consumer Confidence, Q4 GDP, jobless claims, and next week’s crucial PCE inflation release, as indicators of the likelihood of future rate cuts.