Donald Trump’s decision to charge tariffs may have turned market mood linked to his pro-crrypto-lifter, causing a steep fall in Bitcoin (BTC) and majors over the last 24 hours.
Dealers believe that Monday’s carnage could prove to be a buy-dip option for several reasons derived from the possible growth and demand for dollar-stacked stablecoins.
“A Bullish Take is for stableecoins,” Peter Chung, the head of Presto Research, told Coindesk in a telegram message.
“Treasury secretary Scott Bessent has recently noticed that Trump prefers duty rather than sanctions as a diplomatic tool as the latter pushes countries away from the dollar and weakens American economic hegemony. If that is the case, Trump would probably prioritize stableecoin bill in Congress as it would improve the dollar’s functionality and strengthen its global dominance, “Chung said.
Vincent Liu, Chief Investment Officer at Kronos Research, mirrored the mood.
“With ongoing concerns about customs displacements and currency newspaper – illustrated by the Canadian dollar decline towards USD, since tariffs were introduced – StableCecoins could be bound until larger Fiat could see accelerated adoption,” Liu said.
“As a hedge towards financial uncertainty streamline the global transactions, Forex conversion barriers are removing and giving a trouble -free gateway to crypto. In the long term, increased stableecoin resolution could increase liquidity, attract institutional capital and drive legislative clarity. This development can place stableecoins as a cornerstone of the crypto economy, strengthening the stability and fuel of the market, ”added LIU.
A $ 2.2 billion flush from Rypto-Futures since Sunday can also give the bedrock for short-term respite. High liquidations can often signal an over -strict market and indicate the end of a price correction, making it favorable to buy after a steep fall.
Price market areas with high liquidation volumes can serve as support or resistance levels where the price can turn due to the absence of additional sales pressure from liquidated positions.
But if the market continues to fall, they may with short positions may see this as validation, which potentially increases their efforts. Conversely, contrarial dealers may see heavy liquidation as a purchase option and expect a price extraction when the sale of sales is decreasing.
What happened?
Trump imposed a 25% duty on goods from Canada and Mexico and a 10% duty on imports from China over the weekend. The move apparently started a trade war: Canada counteracted with a $ 25% of $ 106 billion worth of US goods, and Mexico is expected to implement similar measures.
Two-year treasuries rose as the 10-year dividend fell, indicating concern for short-term inflation. Asian markets fell on Monday, gold prices fell, oil rose and the crypto market was fueled.
Trump also sees tariffs on goods imported from the European Union, which could come “fairly soon” according to the BBC. The EU said it would act as a collective and “responding firmly” if and when duty comes in, which indicates retaliatory taxes.
The core idea of duty is to make imports more expensive and thereby encourage domestic production and reduce dependence on foreign goods. This is part of a wider strategy for using trade policy to exploit better US terms in international trade negotiations.
However, tariffs increase the cost of goods exported to the United States, which can damage these countries’ economies by reducing the demand for their products. If a country imposes duty, others may respond with their own, leading to a cycle of escalating trading barriers.
Tariffs interfere with established supply chains, which are often globalized. Increasing costs or blocking certain goods can lead to deficiency or higher prices elsewhere, resulting in additional protectionist measures from the affected countries – leading to more disturbance in the financial markets.
The lack of future catalysts could mean that crypto markets are stuck during a break period except for a strong, isolated catalyst that directly encounters Bitcoin.
“The sentiment has become negative with little hope that things can turn, except for a potential Bitcoin strategic reserve and more regulatory support from the government,” Nick Ruck, director of LVRG Research, told Coindesk in a telegram announcement.
“Although market conditions are very different, duties from the previous Trump administration could be a showcase for customs reviews that were only short-term shock to crypto prices, while the general bullish tendency remained intact,” Ruck added.
