US President Trump has officially declared a tariff war against Canada, Mexico, and China, causing global financial markets to tremble, and the cryptocurrency market to plummet as well. Bitcoin briefly dipped to $91,000, Ethereum fell below $2,100, and other Altcoins saw even more severe declines.
QCP Capital Expects Tariff War to Have Lasting Impact on the Market
Regarding the market impact of the tariff war, QCP Capital released the latest analysis stating that the White House has imposed a 25% tariff on Canadian and Mexican goods, and a 10% import tax on Chinese goods. In response, Canada has imposed a 25% retaliatory tariff on $10.6 billion worth of US goods, and Mexico is expected to follow suit.
QCP Capital said that the first round of Trump administration's trade policies has already caused severe market volatility globally, with the US Treasury yield curve flattening, the 2-year yield rising, and the 10-year yield declining, indicating increased market concerns about short-term inflation, while the long-term risk of a trade war may weigh on global economic growth.
The widening price gap between gold prices in New York and London not only reflects the unwinding of popular futures-to-physical (EFP) arbitrage trades, but may also suggest logistical challenges in the movement of gold between different vaults, reminding the market that the scope of the tariffs remains uncertain.
QCP Capital mentioned that the tariff war has led to a general decline in global stock markets, a slight pullback in gold, a surge in oil prices, and a violent sell-off in the cryptocurrency market. Before the US stock market open, the cryptocurrency market, as one of the risk indicators, saw nearly $2 billion in forced liquidations, with ETH declining more than BTC:
This market decoupling phenomenon reinforces the view that today's risk-off sentiment is mainly the result of cross-asset portfolio rebalancing, rather than a single asset event. Volatility is expected to persist as Trump will negotiate with Canada and Mexico tonight, while also claiming that tariffs on the EU "will absolutely happen".
The 21-Week Moving Average as a Key Bull Market Indicator
Meanwhile, Matrixport wrote an analysis stating that although the market had generally anticipated Trump's tariff policy, it still came as a surprise. This may be because last week the market's focus was mainly on DeepSeek, rather than Trump's policies.
However, Matrixport believes that more importantly, retail investors' participation in this market correction has been lacking, and as the uncertainty surrounding the tariffs will continue to exist in the coming days, this uncertainty is affecting the current market adjustment.
Matrixport said that a simple and effective way to judge whether Bitcoin is still in a bull market is to observe the 21-week moving average, which has historically been an important indicator for observing the overall market trend. As long as Bitcoin remains above this level, the bull market still exists, but if it falls below this level, traders should adopt risk management strategies.
