An observer pointed out that macroeconomic concerns, mainly related to tariffs, have overshadowed the impact of Trump's cryptocurrency announcement.
Key points:
- Bitcoin fell more than 3% to $83,200, testing the 200-day moving average.
- Although President Trump recently issued announcements related to cryptocurrencies, the market's focus has shifted to the impact of the ongoing trade war on the economy and the Federal Reserve's cautious stance on interest rates.
- Macroeconomic concerns, mainly related to tariffs, are affecting risk assets.
Bitcoin (BTC) bears on Sunday tried to break through a key support level, continuing a three-day decline, as macroeconomic concerns overshadowed the impact of President Trump's recent cryptocurrency-related announcements.
According to CoinDesk and TradingView data, the leading cryptocurrency by market value fell more than 3% to $83,200, testing the 200-day simple moving average (SMA). Prices have fallen more than 10% since breaking above $92,800 last Thursday.
The latest decline comes as US-China trade tensions are expected to escalate on Monday. Beijing will impose tariffs on some US agricultural products in retaliation for Trump's recent tariff hikes on Chinese imports. The trade war is creating significant uncertainty for markets and policymakers.
On Friday, Federal Reserve Chairman Jerome Powell reiterated that the central bank will maintain a cautious interest rate stance as it assesses the impact of changes in President Trump's policies on the economy. Powell's remarks came on the heels of a weak US non-farm payrolls report, with markets widely expecting the Fed to cut rates at least three times this year.
According to observers, these developments, along with recession signals from the bond market, are diverting attention from Trump's recent announcement of a strategic Bitcoin reserve.
"Despite the very positive news, Bitcoin still fell 4% from $90,000 to below $87,000 within a few hours. It seems that as concerns about the trade war escalate, the market's focus on Trump's cryptocurrency-related initiatives is gradually waning," analytics firm IntoTheBlock said in its weekly newsletter to subscribers on Friday.
The company added that macroeconomic issues, mainly related to tariffs, are weighing on the market and noted that the positive correlation between Bitcoin, Ethereum and the US stock market is strengthening.
"Trump said he doesn't even care about the stock market, and his administration is now focusing on measures like lower long-term interest rates, suggesting that investors may have been overly optimistic about Trump driving a bull market," the company said.
In an article on Saturday, "Crypto Is Macro Now" author Noelle Acheson said the continued weak price performance of BTC after the strategic Bitcoin reserve announcement "highlights that macroeconomic concerns are still exerting heavy pressure on crypto assets."
BTC's daily chart. (TradingView/CoinDesk)
The chart shows that buyers had stepped in below the 200-day simple moving average (SMA) on February 28 and March 2, driving a price rebound. The market may closely watch this level to see if traders take similar action again.
