Crypto Markets Plunge
Bitcoin volatility is one of the key focus points for traders at the start of the new week. The futures market gapped lower by almost 10% at the weekly open last night as risk assets plunged in response to news of Trump imposing 25% tariffs on Mexican and Canadian goods and a 10% tariff on Chinese goods. A subsequent spike higher in the US Dollar has seen commodities and equities prices tanking across the board, putting heavy downward pressure on the crypto market. Canada and Mexico have immediately responded with their own tariffs on US goods while China has openly criticised the move and called for dialogue.
Correction or Reversal?
The question now for crypto traders is whether this spike lower is just a knee-jerk reaction before the bull trend resumes, or if this is the start of a deeper correction lower. BTC looks to have found strong demand into the lows this morning with the market currently bouncing back. However, prices are still down around 5% from Friday’s close and more than 12% from the January highs.
Continued Volatility Risks
Looking ahead, the situation remains highly volatile and crypto prices are vulnerable to a fresh spike lower on news of any further tariff action. The prospect of tit-for-tat actions between the US and Canada and Mexico, as well as the prospect of fresh US tariffs on other countries, as well as a response from China, means that near-term trading could well be choppy for Bitcoin with incoming trade headline likely to be a big directional driver.
Technical Views
BTC
The drop lower in BTC has seen the market breaking below the 100k mark, though a retest of the broken bear channel highs and the 91,750 level is holding as support for now. Bulls need to quickly get back above 100k to avoid a break below current support and a deeper drop.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.