Crypto Declines Today Following Fed’s Market Jitters Over Fiscal Uncertainty

Today, crypto asset values have declined, influenced by doubts surrounding the Federal Reserve and Trump’s trade policies. Bitcoin, Ethereum, and Solana maintain critical base level levels, yet traders exercise caution due to the prevailing global trade disputes and inflation threats.

Earlier today, the crypto market witnessed a decline, decreasing by 4.2% over the past 24 hours, leading the total trading market capitalization to a level slightly over $2.7 trillion. This trend has been evident throughout recent trading sessions. Although BTC, Ethereum, and Solana have shown relative stability by absorbing selling pressure and remaining above essential price floor levels, traders remain wary.

Clear signals from the trading market reinforce this outlook. It has been over a month since Bitcoin exceeded $90,000, and the chances of extending losses into Q1 2025 appear greater than the possibility of prices surging past all-time highs. While recent accumulation may stem bearish pressure, a drop in BTC below $74,500 and April’s lows could potentially lead the trading market to new lows in 2025 within the next few weeks.

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This analysis is closely connected to the Trump administration’s stance on raising tariffs against countries that enact high rates on U.S. products and the subsequent effects on monetary policies.

Current conditions leave investors facing an unpredictable economic landscape, further complicated by mixed signals from the White House regarding international trade stance.

Despite reassurances and somewhat favorable economic indicators, markets remain uneasy as analysts assess the ramifications of tariffs, a decreased likelihood of a Federal Reserve rate cut, and escalating inflation.

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The Balancing Act

For BTC and the wider market to experience relief, it is crucial that favorable trade agreements are established between the U.S. and significant partners, including China, Canada, Europe, and Mexico. The aggressive trade strategy fluctuates between threats and reassurances, which keeps markets in a state of anticipation.

Following the President’s implementation of extensive reciprocal tariffs impacting over 180 countries, markets suffered a downturn. However, the subsequent announcement from the White House regarding a 90-day suspension improved sentiment and assisted in the recovery of crypto prices.

Currently, tariffs stand at 10% for most nations, with the exception of China, but investors continue to worry about the long-term repercussions for both the United States and the global token supply chain.

In a recent statement, White House Press Secretary Karoline Leavitt aimed to address these concerns, indicating that the Trump administration is contemplating relief for U.S. farmers affected by the trade conflict. She also mentioned that 15 nations are actively engaged in negotiations with the U.S. to secure “strong trade deals.”

In the meantime, National Economic Council Director Kevin Hassett stated that the administration is considering either a consolidated update or a gradual implementation of new trade agreements.

Nonetheless, ambiguity remains. Recently, Trump remarked on Truth Social that a prior exemption on electronic tariffs would be applied under a “different framework” at a forthcoming time, leaving markets in a state of uncertainty.

Bitcoin and Crypto market on Alert

The forthcoming weeks will be pivotal for the crypto market, affecting participation in some of the most sought-after presales in April 2025. Once the 90-day tariff freeze concludes, BTC and crypto asset valuations may experience increased volatility and possible downward pressure.

Recently, Atlanta Fed President Raphael Bostic offered a sobering reflection on the U.S. economy, describing the current era as enveloped in a “dense fog” due to tariffs and noting that the economy is in a “significant pause.”

 

Although there’s potential for a more lenient monetary policy, the opportunity for rate reductions is dwindling as tariffs exacerbate inflation. Elevated tariffs drive up inflation, lessening the necessity for the central bank to relax its monetary stance. The Consumer Price Index (CPI) increased marginally to 2.4% in March 2025.

With disruptions within global trade markets, the U.S. economy may decelerate, potentially leading to a recession. This risk continues to loom despite Hassett’s claim that there’s “absolutely no chance” of a recession in 2025. He highlighted that companies, including Apple and TSMC, are shifting operations back to the U.S. to avoid steep tariffs.

A high-interest rate scenario, combined with an underperforming economy, could present hurdles for crypto markets, which are becoming increasingly reactive to changes in monetary policy. Historically, periods of low interest rates have channeled capital into BTC, even enhancing the valuation of some of the top Solana meme coins.

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