Bitcoin retreats over 2%, diverging from equities, as White House messaging on China trade policy raises inflation concerns and rattles digital asset investors.
Digital asset markets faced renewed pressure over the weekend, with Bitcoin leading a downturn triggered by fluctuating signals from the Trump administration regarding trade tariffs on Chinese goods. The uncertainty injected fresh volatility into the crypto space, reversing some of the prior week’s optimism.
On Sunday, Bitcoin’s price dipped by more than 2%, falling to approximately $83,482 during Asian trading hours. This move contrasted with the relative buoyancy seen in traditional equity markets, where futures pointed towards gains despite the trade policy ambiguity. Ethereum, the second-largest cryptocurrency by market capitalization, also experienced weakness, slipping below the $1,600 mark, while other alternative coins (altcoins) showed a mixed performance according to CoinGecko data.
The market turbulence stemmed directly from weekend communications concerning U.S. tariffs on Chinese-manufactured electronics, including key items like smartphones, semiconductors, and laptops. Initial confusion arose about potential exemptions. However, President Trump later clarified via Truth Social that while certain electronic goods might be temporarily excluded from a new 10% “reciprocal” tariff, they would still be subject to a separate, existing 20% levy linked to national security and efforts against fentanyl trafficking.
Trump forcefully stated, “NOBODY is getting ‘off the hook’ for the unfair trade balances… especially not China,” emphasizing that no broad tariff “exception” had been granted. Adding to the outlook, Commerce Secretary Howard Lutnick indicated that further sector-specific tariffs targeting electronics could be implemented within the next couple of months.
While equity markets, evidenced by gains in Nasdaq 100 (+1%) and S&P 500 (+0.7%) futures, seemed to find some relief in the temporary nature of the 10% exclusion, the cryptocurrency sector displayed less resilience. The weekend’s price action marked a notable shift from the stability observed earlier in the week, when market participants had positioned for potential upside driven by encouraging signs that inflation might be cooling.
This fragile positive narrative has now been complicated by the resurgence of geopolitical trade tensions and potential signs of decelerating capital flows into U.S.-based spot crypto ETFs. The prospect of new or reinforced tariffs has reignited fears about their inflationary impact.
Market analysts suggest this development could influence the Federal Reserve’s monetary policy trajectory. “Anticipation has dampened for an emergency rate cut ahead of the next Fed meeting in May (and for a rate cut before the June Fed meeting),” noted Darren Chu, consulting analyst at BRN. He added that the “medium-term inflationary effects from the Trump administration tariffs now expected to keep Powell from cutting before June.”
This implies a potential continuation of a “higher-for-longer” interest rate environment, which typically acts as a headwind for risk assets like cryptocurrencies. Investors are now closely monitoring technical levels, with $81,000 seen as a critical support zone for Bitcoin. A decisive break below this level could trigger a cascade of liquidations from leveraged trading positions, potentially intensifying the downward pressure on an already sensitive market.