US Tariff Uncertainties Slow Market's Growth, Will There Still Be A Bull Market?

The financial markets are currently on edge as uncertainty surrounding U.S. tariffs casts a shadow over investor sentiment. Despite a short-term rally in Bitcoin and other crypto assets, experts caution that these gains may not signal the beginning of a new bull market.

The broader market sentiment remains fragile, shaped by ongoing tariff battles and macroeconomic pressures.

Tariff Pause Sparks Temporary Crypto Rally

At the start of last week, a wave of volatility hit the cryptocurrency market. Bitcoin (BTC) plummeted from its recent high of $84,000 to a five-month low of $74,000. The sharp decline was largely driven by retaliatory tariff actions from China and the European Union in response to U.S. trade policies.

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However, market conditions began to shift midweek when U.S. President Donald Trump announced a 90-day pause on tariffs for all countries except China. While China continues to face a steep 125% tariff, other nations will see a 10% rate during this temporary reprieve. 

The announcement provided much-needed relief, triggering a rapid rebound in crypto prices. BTC climbed back to around $83,460, bouncing off its 365-day moving average of $76,100—an important technical support level in previous market cycles.

Market Sentiment Remains Cautious

Despite the positive price movement, analysts remain skeptical about a sustained bull market. According to a recent report by CryptoQuant, market sentiment is still largely bearish. The data shows that Bitcoin has entered one of its least bullish phases since November 2022. 

The cryptocurrency’s Bull Score Index—a composite of nine on-chain metrics and one market indicator—has dropped to a low of 10 out of 100. This index serves as a barometer for investor confidence, with anything below 40 indicating bearish conditions.

Only one of the ten measured indicators, BTC’s price relative to its 365-day moving average, is currently showing bullish signals. The remaining nine, including metrics like active addresses and transaction volume, continue to point downward. 

These indicators collectively suggest that while the price is temporarily stabilizing, the fundamental environment for a bull market is still lacking.

Resistance Levels Ahead

Looking forward, traders are closely watching key resistance levels that could either validate or reject the current recovery trend. Analysts have identified $84,000 and $96,000 as the next major hurdles for Bitcoin. 

A decisive break above these levels could reignite bullish momentum. However, if the price fails to gain traction, it may fall back below the 365-day moving average, triggering a deeper bear market.

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The Bigger Picture: Trade Wars and Global Markets

The root of the current volatility lies in broader geopolitical and economic concerns. Trade wars and tariff policies are not only affecting traditional markets but are also seeping into crypto sentiment. The correlation between tech stocks and cryptocurrencies is growing stronger, as both are viewed as innovation-driven and high-risk asset classes.

This interconnectedness means that any negative impact on the tech sector—such as higher production costs due to tariffs—can indirectly influence crypto markets. As global supply chains adjust and companies brace for longer-term trade disruptions, uncertainty may continue to weigh on investor confidence.

Conclusion: A Wait-and-See Approach

In summary, while Bitcoin and other digital assets have shown resilience amid tariff pauses, the current rally appears to be more of a temporary reaction than a fundamental shift. Market sentiment remains bearish, and key resistance levels need to be broken before a true bull market can begin.

For now, investors are advised to proceed with caution, closely monitoring both technical indicators and geopolitical developments. The next few weeks will be crucial in determining whether the crypto market can break free from its bearish grip—or if the uncertainty around U.S. trade policy will continue to suppress growth.

FAQ

How do U.S. tariffs impact cryptocurrency markets?

U.S. tariffs influence global trade dynamics, which in turn affect investor sentiment across all financial markets, including cryptocurrencies. Increased tariffs can lead to economic uncertainty and decreased risk appetite, causing volatility in assets like Bitcoin.

What is the significance of Bitcoin's 365-day moving average?

The 365-day moving average serves as a critical support level for Bitcoin. When BTC trades above it, it’s often viewed as a bullish sign. A drop below this level can indicate the beginning of a bear market, making it a key metric for market analysts.

Is the current Bitcoin rally a sign of a bull market?

Not necessarily. While Bitcoin has bounced back due to paused tariffs, on-chain data from CryptoQuant shows weak market sentiment. Most key indicators remain bearish, suggesting the rally might be temporary unless major resistance levels like $84,000 and $96,000 are broken.