Bitcoin Approaches Bearish Cross, Yuan Weakens Amidst Asian Market Response to Tariffs
Asian equity markets and U.S. stock futures have experienced declines, alongside Bitcoin inching toward a bearish technical formation amid rising trade tensions.
Key Points:
- President Trump announced reciprocal tariffs on imports from 180 countries, placing the highest burden on China with a total of 54%.
- China might retaliate, which could negatively affect global markets and elevate risk aversion.
- The Asian markets saw a downturn, while Bitcoin approaches a bearish technical threshold.
Traders are keeping a close watch on Beijing’s forthcoming actions in response to President Trump’s sweeping tariffs.
Last Wednesday, Trump revealed tariffs on imports from significant global partners, namely China and the European Union.
The president has escalated tariffs, imposing a new 34% fee on Chinese imports, on top of the existing 20% duty, bringing the cumulative tariff to 54% for China — the highest for any nation.
Observers suggest that China’s reaction to these tariffs could dictate market movements.
“Everything now depends on China. If China depreciates the Yuan in response to today’s significant additional U.S. tariffs, that will prompt a global risk-off sentiment impacting emerging markets first and potentially extending to the U.S.,” said Robin Brooks, managing director and chief economist at the International Institute of Finance.
Early Thursday, China urged the U.S. to retract these tariffs while announcing immediate counteractions. The yuan also dipped to a seven-week low against the dollar as Asian equities plummeted and Bitcoin approached its death cross pattern.
A drop in the Yuan would increase the cost of Chinese goods internationally, posing risks for currency trading and potentially unnerving financial markets, as witnessed in previous years.
Bitcoin, the market’s leading cryptocurrency, hovered around $83,300 after a decline from $88,000 to $82,500 following the tariff announcements.
The 50-day simple moving average of Bitcoin’s price seems set to fall below the 200-day average, indicating a potential bearish crossover pattern. This is particularly notable against a backdrop of increasing trade tensions, with options markets indicating a preference towards protective bets leading up to June.
BTC’s daily chart.
