**Bitcoin Bounces Back After Tariff Turmoil, But Caution Remains in the Air**
This week has been quite the rollercoaster for the crypto market! After facing a significant dip due to some newly announced retaliatory tariffs, Bitcoin made a notable comeback following President Trump’s announcement of a 90-day pause on those tariffs. While this pause provided a much-needed breather for investors, it raises an important question: Is this just a temporary respite from the chaos, or are we genuinely on the path to recovery?
**Taking a Closer Look**
Earlier this week, the crypto landscape was shaken by escalating trade tensions. With China and the EU responding with new tariffs, Bitcoin’s price plummeted from around $84K to a five-month low of nearly $74K. This situation served as a stark reminder that global politics can impact the crypto world just as significantly as traditional markets. Fortunately, the downturn was short-lived. On April 9, President Trump’s announcement of a 90-day tariff pause brought a wave of optimism back into the market. This pause includes a 10% tariff on all countries, except for China, which faces a much steeper tariff of 125%. This shift in policy played a vital role in restoring investor confidence, leading to a significant recovery in Bitcoin’s value.
In his statement, Trump emphasized the need for change, saying, “Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately. At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A. and other Countries is no longer sustainable or acceptable.”
From a technical perspective, Bitcoin’s recent price bounce was supported by its 365-day moving average (MA), which is currently around $76.1K. Historically, this MA has acted as a crucial support level. If Bitcoin were to drop below this moving average, it could signal the start of a prolonged bear market, similar to conditions seen in August 2024, July 2021, and December 2021.
Despite the positive technical rebound and the encouraging response to the tariff pause, investor sentiment remains somewhat cautious. CryptoQuant’s Bull Score Index, which measures overall investor sentiment, currently sits at a concerning low of 10, the lowest it has been since November 2022. This low score reflects a prevailing sense of caution among investors, suggesting that the likelihood of a sustained rally is low. CryptoQuant warns that if the Bull Score Index continues to hover below the 40 mark, market conditions could mirror those of previous bearish cycles.
Looking ahead, if Bitcoin can maintain its upward momentum, it may face resistance at near-term price levels around $84K, and then again at the $96K zone. Historically, these resistance levels have proven to be significant hurdles in the market. As we navigate this unpredictable landscape, it’s essential for investors to stay informed and cautious.
