The Trump administration introduced new tariffs and expanded existing ones, which resulted in increasing trade tensions among major partners like China, the European Union, and Mexico. Global financial markets are significantly impacted by these actions, which causes increased economic uncertainty and volatility. These tariffs are aimed at a range of products, from aluminium and steel to cars and various electronic components. Unsurprisingly, some countries have responded with counter-tariffs on US exports, which could potentially trigger a big trade war.

This back-and-forth has resulted in increased trade barriers, which are slowing down economic growth—a trend that’s evident in recent macroeconomic indicators, including the Conference Board consumer sentiment index. Consequently, forecasts for US GDP growth have been adjusted downward due to the impact of these tariffs. The automotive sector, which relies heavily on imported parts, is also feeling the pinch, with Ford Motor Co. recently announcing a significant cut in expected dividends.

How trade barriers are turning Bitcoin into a global safe haven

Donald Trump’s recent actions prove that his attitude towards his tariffs is very consistent and goal-oriented, which has sparked a ‘contrarian’ positive outlook for cyclically resistant investment assets, where Bitcoin (BTC) occupies a special position. With rising tariffs and inflation worries, more people are turning to alternative, discorrelated assets, which are broadly viewed as a safeguard against both inflation and impending economic instability in general.

Historically, Bitcoin has proven to be quite resilient during tough economic times. For instance, during market upheavals—like the banking sector turmoil we saw in 2023 following the collapse of Silicon Valley Bank—Bitcoin evidently experienced price surges, hinting at a “flight to safety” trend being formed robustly and meaningfully. However, to date, such trends remain mostly perceptional and, therefore, unfortunately, hard to quantify and algorithmize.

Having said that, the fact that the US is still at the forefront of various innovative efforts in cryptocurrency and AI somewhat mitigates the broader implications of the tariff situation. Recently, Senator Cynthia Lummis (R-WY) put forth a legislative proposal suggesting that the US should acquire one million BTC, representing about 5% of the total fixed supply. This initiative is expected to spark a new wave of significant activity in the crypto market.

The combination of supportive government policies for crypto and the expectation of more tariff actions will likely create a complex but potentially very favorable market sentiment for Bitcoin. Once again, investors, swayed by these developments, are starting to see Bitcoin as a safe haven with the potential for sustained growth in a post-tariff landscape. The current market vibe, shaped by Trump’s tariff strategies and the prospect of long-term shifts, makes Bitcoin look like a low-downside-high-reward investment opportunity.

AI and robotics: Winners in the tariff war

Meanwhile, AI-aided automation and robotics are on the rise as increasing import costs from China push American manufacturers to cut labor costs. Similarly, countries like Vietnam and India are reaping the benefits as global companies relocate their manufacturing operations from China to avoid tariff-related expenses. Additionally, I see a lot of promise in sectors like AI, nuclear energy, and other manufacturing industries, which have the chance to set up operations in the United States.

Integrating AI and automation within manufacturing industries can drive greater adoption of Bitcoin as a secure and efficient method of financial transactions, incorporated into metaverse and web3 ecosystems. Furthermore, the demand for AI technologies to support automated processes will likely surge, presenting new investment opportunities in the AI sector. Most importantly, the synergy between AI-aided automation, robotics, Bitcoin, and AI investments has the potential to reshape the future of the manufacturing and technology industries, which will drive even more attention to Bitcoin.

Tariffs, trade wars, and rising risks: What investors should watch out for

Trade barriers may—at least initially—disrupt certain supply chains, increase business costs, and reduce export demand due to retaliatory tariffs. Instability in one major market or economy due to trade tensions can spill over to other countries and regions, creating a global ripple effect. This can lead to lower investment, reduced hiring, and overall slower economic expansion, potentially even triggering a recession where gold and alternative assets like Bitcoin would definitely play special risk aversion roles, making their increasingly anti-correlative Betas more and more attractive for ordinary investors to “join the club.”

It is important to keep the focus on the long term and invest in industries with high potential, such as AI, nuclear energy, healthcare, and rare earth metals. There may be some transitory, recoverable meltdown because the market is overvalued due to years of way-too-buoyant liquidity and overrated optimism. Still, if companies decide to quickly move to make production in the US and replace costly outsourcing, they have a great future due to the huge domestic market in this world’s largest economy.

To navigate the challenges of this shaky market, both private investors and institutions can use a variety of diversification strategies. One effective approach is asset class diversification, which involves spreading investments across different types of assets like stocks, bonds, real estate, commodities, and certainly alternative options like Bitcoin and other cryptocurrencies. Additionally, it’s important to consider both developed and emerging markets while using various investment strategies—like value investing, growth investing, or dividend investing—which normally yield different results in different market conditions.

Final words

Currently, the market’s reaction to Trump’s tariffs suggests that Bitcoin is becoming more discorrelated to broader macroeconomic and geopolitical factors and, hence, more appealing regarding both asset-protection and investment portfolio hedging purposes. Historically, Bitcoin demonstrated notable resistance to economic cycles and episodes of banking system instability. Now, it offers a legitimate test of its suitability as a risk aversion tool for real-world economic troubles. Its inclusion in the U.S. strategic reserve further underpins this thesis.

John Murillo

John Murillo is the chief dealing officer of B2BROKER, a global fintech solutions provider for financial institutions. John is a seasoned trading professional with more than 20 years of experience in capital markets. Throughout his professional life, John has managed broker-dealer business, performed risk management for trading desks with high volumes, and worked with institutional clients worldwide to deliver tailored liquidity solutions. He has been part of B2BROKER since its early days, ensuring the company grows and functions effectively. At B2BROKER, he is responsible for all the facets of liquidity, ensuring client setups are seamless before going live and enhancing internal risk management procedures. Treasury operations, creating strategic services, and expanding international market presence are also among his duties.

A widely followed analyst believes Bitcoin (BTC) will remain in a bull cycle if the flagship crypto asset holds one key level as support.

In a new video update, crypto strategist Benjamin Cowen tells his 892,000 YouTube subscribers that if Bitcoin falls below $69,000, a bear market phase may ensue.

“In the short term for Bitcoin, the good news is that we’ve maintained above the 2024 high; we maintained above that. And that’s a good thing. And I still think that Bitcoin could go all the way down to $69,000 and the structure of the market stay intact.

But below that, I would not be as optimistic. Okay, I wouldn’t be. This is the zone [between $73,617 and $69,048] where you really would want to see the bulls come to the table and hold support because if they don’t, and if it comes down here [below $69,000], that’s probably it.”

Bitcoin is trading for $79,752 at time of writing, down 4.3% in the last 24 hours.

Cowen also believes that either US President Donald Trump or the Fed will take action in the coming months to counter drastic downward moves in the stock market as Trump keeps his tariff war going.

“I think there are levels in the market where the powers that be will try to step in and try and encourage market participants to take on risk and to get more exposure. And I think there is a chance here that we just figured out where that is for the President, and it’s a 20% drawdown in the S&P or potentially the 10-year yield skyrocketing. Now, we don’t yet know… where the Fed will then come to the rescue. We don’t know that yet….

So it’s one of those things where, if the President steps in and reduces some of the uncertainty, then the Fed might not have to do anything, but if he continues on with it, then we’ll figure out where the Fed put is. If we get out into July and all this tariff stuff just comes right back, then we might figure out where the Fed will actually start to try to intervene. But I thought that this was the level that the President decided it was time to try to intervene and figure something else out.”

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Generated Image: Midjourney

Bitcoin price started a fresh increase above the $80,000 zone. BTC is now correcting gains and might struggle to stay above the $79,500 support.

• Bitcoin started a fresh increase above the $80,000 zone.
• The price is trading above $79,500 and the 100 hourly Simple moving average.
• There is a new connecting bearish trend line forming with resistance at $80,500 on the hourly chart of the BTC/USD pair (data feed from Kraken).
• The pair could start another increase if it clears the $80,500 zone.

Bitcoin Price Dips Again

Bitcoin price started a fresh increase above the $77,500 zone. BTC formed a base and gained pace for a move above the $79,500 and $80,000 resistance levels.

The bulls pumped the price above the $82,500 resistance. A high was formed at $83,548 and the price recently started a downside correction. There was a move below the $81,500 support. The price dipped below the 23.6% Fib retracement level of the upward move from the $74,572 swing low to the $83,548 high.

Bitcoin price is now trading above $79,200 and the 100 hourly Simple moving average. On the upside, immediate resistance is near the $80,500 level. There is also a new connecting bearish trend line forming with resistance at $80,500 on the hourly chart of the BTC/USD pair.

The first key resistance is near the $81,500 level. The next key resistance could be $82,500. A close above the $82,500 resistance might send the price further higher. In the stated case, the price could rise and test the $83,500 resistance level. Any more gains might send the price toward the $85,000 level.

More Losses In BTC?

If Bitcoin fails to rise above the $80,500 resistance zone, it could continue to move down. Immediate support on the downside is near the $79,500 level. The first major support is near the $79,000 level and the 50% Fib retracement level of the upward move from the $74,572 swing low to the $83,548 high.

The next support is now near the $78,000 zone. Any more losses might send the price toward the $76,500 support in the near term. The main support sits at $75,000.

Technical indicators:

Hourly MACD – The MACD is now losing pace in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now above the 50 level.

Major Support Levels – $79,500, followed by $79,000.

Major Resistance Levels – $80,500 and $81,500.