Key Points

• Bitcoin (BTC) has been experiencing weakness for three consecutive days, signaling a risk-off sentiment in traditional markets.
• Canada has joined Mexico in imposing retaliatory tariffs on U.S. goods.
• The ongoing trade conflict and increased deportations of illegal migrants from the U.S. could lead to inflation, affecting market stability.

Bitcoin (BTC), the top cryptocurrency by market capitalization and the only major asset actively traded over the weekend, is currently trading below $100,000, marking three days of decline. This comes as Canada announced retaliatory tariffs aimed at the United States.

Canadian Prime Minister Justin Trudeau declared that Canada would implement a 25% tariff on various U.S. goods, including beverages and appliances, in response to President Donald Trump’s imposition of tariffs on Canadian and Mexican imports (25%) and a 10% surcharge on products from China. In retaliation, China has stated it plans to file actions against the U.S. at the World Trade Organization and promises unspecified countermeasures to protect its interests.

The escalation in trade tensions, coupled with mass deportations from the U.S., is perceived to potentially fuel inflation, diminishing the likelihood of swift interest rate cuts by the Federal Reserve. The current weakness in BTC’s pricing is presumed to reflect these economic concerns, providing risk-off signals to traditional assets. The broader cryptocurrency market has followed BTC in a downward trend, with the CoinDesk 20 Index seeing a decline of over 2%.