In the early days of the week, Bitcoin $83,691 climbed from $84,000 to $88,000, showcasing a weekly increase of approximately 3%. However, despite this rise, an atmosphere of unease prevails in the markets. The uncertain trajectory of economic developments is causing investors to behave cautiously, keeping cryptocurrency traders alert to potential risks despite the price hikes.
Trade Tensions and Fear Index Alarm
Growing tensions in international trade and new tariffs are intensifying pressure in the markets. The United States’ new trade policies target not only major players like China but also close allied nations. These developments have led to large-scale selling waves, deepening the uncertainty in the markets. A recent report from Kaiko emphasized that the impact of Trump’s trade policies has shaken financial markets, especially predicting rapid cost increases in the automotive sector.
All these developments are influencing investors’ expectations for the future. Although the Fear and Greed Index indicates that the market remains in the “fear” zone, signs of gradual recovery are emerging. However, this recovery is quite fragile and highly susceptible to external factors. Economic insecurity is directing investors toward short-term trades, while long-term plans are being sidelined.
Central Bank Policies and Investor Expectations
The Federal Reserve’s interest rate policies continue to play a decisive role in market movements. Renowned investor Arthur Hayes emphasizes that investors should focus not only on tariffs but also on the actions of the Fed under Powell’s leadership. According to Hayes, tariffs are becoming secondary, while monetary policies will be the primary factor determining market direction.
Mike Wilson from Morgan Stanley takes a broader perspective. He believes that markets are influenced not only by tariffs but also by various factors such as inflation, consumer confidence, and global growth. Particularly for leading cryptocurrencies like BTC and ETH, such economic news can lead to sharp price fluctuations, creating a perception among investors that careful action is necessary.
Rising cost expectations and trade uncertainties are reducing risk appetite. Potential price hikes in the automotive sector could have a cascading effect on other sectors as well. Whether the current rise in the cryptocurrency market will be permanent depends on the clarity of these factors.