The BTC/USD pair has been under significant downward pressure in recent weeks, continuing its downtrend as macroeconomic concerns, particularly the escalating trade conflict between the US and China, have weighed heavily on market sentiment.
Bitcoin, traditionally a volatile asset, is now feeling the strain of broader economic uncertainty. The brokers at Lesrouleaux provide an in-depth analysis of this topic in the article.
Its price slid to $76,80, well below its year-to-date high of $109,300. With the current fundamental and technical landscape indicating continued weakness, the path of least resistance for Bitcoin appears to be lower in the near term.
China and US Trade Conflict Accelerates
A key factor driving this bearish trend is the escalating trade war between the world’s two largest economies, the United States and China. The US President’s administration has been at the forefront of this conflict, ramping up rhetoric and tariffs.
After previously announcing a 20% tariff on Chinese goods, the US President shocked markets by introducing an additional 34% tariff, marking a dramatic escalation. In retaliation, China imposed its own 34% tariff on US goods, further intensifying the dispute.
The trade war reached a fever pitch on Wednesday when the US President unveiled another 50% tariff hike, bringing the total tariff on many Chinese goods to as high as 104%. This aggressive move has the potential to severely disrupt trade between the two nations and, by extension, the global economy.
Analysts are increasingly concerned that this trade conflict could lead to a recession in the US, China, and other global markets. Prominent financial institutions, such as Goldman Sachs, JPMorgan, and Citigroup, have recently revised their recession probabilities for the US economy, citing the negative economic effects of the prolonged trade tensions.
While the deterioration in trade relations is alarming, it is important to remember that the US President’s negotiation tactics often start at extreme levels and may soften over time. However, the immediate effect is undeniable–recession risks are rising, and Bitcoin, often seen as a hedge against economic uncertainty, has been caught in the crossfire.
Impact on the BTC/USD Pair
As global markets adjust to the deteriorating trade environment, Bitcoin has followed a predictable pattern of reacting to risk sentiment. The cryptocurrency, highly sensitive to macroeconomic shifts, has been unable to maintain its upward trajectory in the face of such risks. On Wednesday, the BTC/USD pair dropped to $76,800, marking a significant retracement from its year-to-date high of $109,300.
The upcoming Federal Open Market Committee (FOMC) minutes and inflation data could provide additional insight into the Federal Reserve’s stance on economic conditions. However, analysts expect their impact to be muted, given the rapidly evolving nature of the trade dispute.
The world has changed considerably over the past few days, and any short-term upside catalyst may be overshadowed by the broader economic uncertainty stemming from the US-China trade conflict.
BTC/USD Technical Analysis
From a technical perspective, the BTC/USD chart paints a bearish picture. Bitcoin’s recent price action has seen the cryptocurrency fall from its year-to-date high of $109,200 to a low of $76,700, the lowest point in several months.
This substantial decline has been accompanied by the formation of a “death cross” pattern, where the 50-day moving average (MA) has crossed below the 200-day moving average. This pattern is generally seen as a bearish signal, indicating that momentum is firmly to the downside.
Adding to the bearish outlook, the BTC/USD pair has invalidated a potential double-bottom pattern at $76,780. A double-bottom pattern typically signals a reversal of a downtrend, but in this case, Bitcoin’s failure to establish a meaningful recovery above the neckline at $88,730 suggests that the downside pressure remains intact.
Other technical indicators, such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), further support the bearish view. Both indicators have been trending lower, indicating that selling pressure remains strong. The RSI is hovering in oversold territory, which might suggest that Bitcoin is due for a short-term bounce, but the broader trend appears firmly negative.
Conclusion
The BTC/USD pair is under significant pressure from both a technical and fundamental standpoint. The ongoing US-China trade conflict is driving risk-off sentiment in the markets, with many analysts predicting a higher likelihood of a global recession.
Technically, Bitcoin’s recent price action suggests that the path of least resistance is lower, with a continuation of the downtrend likely. Investors and traders should remain cautious and monitor key support and resistance levels closely for any signs of a reversal.
COMTEX_465025770/2922/2025-04-29T03:57:17
