Bitcoin (BTC) Surges to New Monthly Highs Ahead of US Tariff News

Bitcoin (BTC) demonstrated renewed strength, reaching peak levels for April during the opening of Wall Street trading on April 2nd. This upswing occurred as market participants braced themselves for a widely anticipated announcement from the United States regarding “Liberation Day,” seemingly referencing a new policy or economic strategy.

BTC/USD 1-hour chart. Source: Various Sources

Bitcoin Attempts Breakout Amid Tariff Speculation

According to data gathered from various market monitoring platforms, Bitcoin achieved intraday highs of $86,444 on a prominent exchange. This marks Bitcoin’s strongest showing since late March. The price fluctuations intensified as the market awaited a significant trade tariff announcement by US President. The official address, delivered from the White House Rose Garden at 4 PM Eastern Time, included a subsequent press conference.

While US stock markets showed slight declines following the opening bell, Bitcoin managed to recover previously lost ground. This resilience positioned Bitcoin within a crucial zone characterized by long-term trend lines. Experts have highlighted the importance of several moving averages, including the widely observed 200-day Simple Moving Average (SMA), which traditionally serves as a robust support level during bull markets, but is currently below the price.

BTC/USD 1-day chart with 200 SMA. Source: Various Sources

Leading market analyst Rekt Capital has focused on the 21-week and 50-week Exponential Moving Averages (EMAs). Rekt Capital noted the ongoing consolidation between these EMAs, stating that the 21-week EMA is trending downwards, potentially influencing price action.

“The consolidation between the two Bull Market EMAs continues. However, the 21-week EMA (green) represents lower prices as it declines,” Rekt Capital posted on a social media platform, accompanied by an illustrative chart.

Rekt Capital further elaborated that the 21-week EMA was around $87650. The downtrend of this EMA could facilitate a Bitcoin breakout.

BTC/USD 1-week chart with 21, 50 EMA. Source: Various Sources

Rekt Capital also highlighted the possibility of a bullish scenario. This optimism stems from Bitcoin’s attempts to break free from a prolonged downtrend on the daily charts.

“Bitcoin is one Daily Candle Close above & retest of the Downtrend away from breaking out into a new technical uptrend,” Rekt Capital confirmed.

BTC/USD 1-day chart. Source: Various Sources

Notably, the daily Relative Strength Index (RSI) for Bitcoin had previously broken out of its own downtrend, which had persisted since November of last year.

Potential for Price Correction to $76,000

Despite the recent positive momentum, market analysts at trading firm QCP Capital expressed caution regarding the broader market outlook.

According to QCP Capital, risk assets are expected to face headwinds following the tariff announcements.

“In crypto, sentiment remains broadly subdued. BTC continues to trade without conviction, while ETH is holding the line at $1,800 support. Across the board, crypto markets are showing signs of exhaustion with numerous coins down significantly,” the firm stated in a message to its subscribers.

QCP Capital emphasized that without a notable improvement in the macro environment or a compelling catalyst, a significant market reversal is unlikely. The firm added that, while minimal trading positions could contribute to a gradual price increase, they are hesitant to pursue upward movements until the overall macro picture becomes more favorable. History has shown that similar tariff-related events in the past have often triggered negative reactions in Bitcoin prices.

However, some industry observers are more optimistic. Asset management firm Swissblock, for example, suggests that there are “no signs of an imminent collapse” for Bitcoin.

“Will $BTC hold as a hedge, or follow TradFi into a pullback?” Swissblock asked in a social media thread, describing Bitcoin’s price action as being “at a crossroads.”

Bitcoin price momentum chart. Source: Various Sources

Swissblock has indicated that a negative market reaction could potentially drive Bitcoin back down to multi-month lows around $76,000, representing a significant price decrease from current levels.

Disclaimer: This article is intended for informational purposes only and should not be considered investment advice. Trading and investing in cryptocurrencies involves substantial risk, and individuals should conduct thorough research and seek professional guidance before making any financial decisions.