The ongoing uncertainty surrounding potential tariff changes poses the most significant risk to Bitcoin's bullish momentum over the next two months, according to Swyftx lead analyst Pav Hundal. Hundal suggests that the current "tariff sabre rattling" creates a precarious situation for those betting on Bitcoin's continued rise.
The analyst warns that if the current state of tariff ultimatums persists without resolution, it could trap the market in a cycle of uncertainty, hindering Bitcoin's upward trajectory. Should this scenario unfold, a potential drop below $100,000 could occur.
Hundal points out that U.S. policymakers might delay monetary easing until concrete data emerges regarding the actual impact of the tariffs. Such a delay could trigger a growth slowdown, further dampening the enthusiasm in risk-on markets like cryptocurrencies. The Federal Reserve's recent decision to hold rates steady, citing concerns about rising unemployment and inflation, underscores this cautious approach.
Bitcoin's price movements earlier this year reflect the market's sensitivity to tariff-related news. When the prospect of tariffs initially surfaced in early February, Bitcoin's value dipped below $100,000, remaining volatile for over three months, as traders reacted to trade policy announcements, pauses, and shifts in sentiment.
While a recent U.S. Court of International Trade ruling blocked the former President Donald Trump from imposing tariffs, arguing that he had overstepped his authority, the situation remains fluid. Trump recently doubled tariffs on foreign steel and aluminum to 50%, highlighting the ever present threat of tariff related volatility.
Despite these potential headwinds, some analysts remain optimistic about Bitcoin's prospects. An end to the "tariff sabre rattling" may see Bitcoin rallying to $120,000 this month, according to Pav Hundal. Bitfinex analysts suggest that Bitcoin could surge next month if U.S. job data turns out to be weaker than expected.
Currently, Bitcoin is experiencing a battle between bulls and bears at the $105,000 level.
