U.S. President Trump's tariff policy launched yesterday (3rd) triggered global turbulence, causing a bloodbath in the stock market and crypto market. Bitcoin briefly plummeted to a low of $81,203, while Ethereum dropped to $1,748. Many investors pessimistically claimed that Trump had opened the door to a bear market, leaving no hope.
However, according to CoinDesk's report today (4th), the market's extreme reaction and overselling to Trump's tariffs have passed. Traders are now focusing on economic data and the Federal Reserve's stance and decisions in the coming months.
Focus on Tonight's Non-Farm Payrolls Data
A report from CryptoQuant indicates that before Trump officially announced tariffs, investors transferred large amounts of cryptocurrencies like BTC, ETH, and XRP to exchanges. Combined with the market's decline after the tariff announcement, this confirms that investors are more inclined to take profits and wait in an environment of increasing economic uncertainty, leading to a sharp decline in demand for BTC and ETH in the perpetual futures market.
The report reminds that the market has almost priced in the short-term negative impact of Trump's tariffs. Traders should focus on tonight's U.S. Non-Farm Employment Report, which relates to the health of the U.S. economy and the Fed's interest rate resolution this year.
QCP Capital Predicts Four Rate Cuts This Year
Regarding potential Fed actions in response to Trump's tariffs, QCP Capital analyzed today that investors are preparing for signs of weakness in the U.S. labor market. If non-farm data is weaker than expected, it will provide further support for Fed rate cuts this year.
Additionally, QCP Capital noted that while the Fed previously stated rate cut pace would be limited, the market now expects the Fed might cut rates 4 times this year in June, July, September, and December, each by one point.
The analysis also suggested that favorable non-farm data tonight could interrupt the crypto market's downward trend and provide momentum for Bitcoin's rebound. However, if the data doesn't support U.S. rate cuts, the crypto market might face selling pressure, and investors should remain cautious.
