Cryptocurrency prices were in flux heading into President Donald Trump's "Liberation Day," with retaliatory tariffs set to roll out on broad range of U.S. imports. Bitcoin and digital-asset prices attempted to push higher early Wednesday after climbing on Tuesday. One analyst says it's a 50-50 shot to see a bitcoin rebound, or a further dive.
"As Liberation Day approaches, the uncertainty around the magnitude of the tariffs is keeping bitcoin and other risk assets in limbo," wrote Nic Puckrin, crypto analyst and founder of The Coin Bureau, an educational crypto outlet.
Puckrin noted that the trading range had tightened up for bitcoin futures on the Chicago Mercantile Exchange, after swinging wide over the weekend. In addition, bitcoin is now trading below its 200-day average, while 24-hour liquidations remain low at under $250 million. That indicates momentum could again be on the downside, according to Puckrin.
"Until there is more clarity around tariffs, this rangebound pattern will continue," he said. "But if we get softer news than feared or some sort of concessions, we could see a breakout from the current trading pattern." If that occurs, Puckrin expects $88,000 will be the short-term price to watch. But there would still need to be a notable increase in volume to indicate the rally is extended.
Conversely, a tariff shock could prompt a bitcoin breakdown near $79,000 in the short term, or even further lower to the next support level at $73,000 if extreme fear grips the market. Puckrin added that the bitcoin long-short ratio is currently close to 50-50. "We really could go either way right now, showing just how uncertain the current macro backdrop is," he said.
In terms of positive indicators, there has been low trading volume over the last few weeks and the crypto Fear & Greed Index is still hovering around fear. Puckrin said this could indicate that the market is at, or very close to a low.
"In the longer term, we can be fairly confident that BTC will rally from here — the question is only around timing," he said.
New Catalyst Needed
Chris Chung, founder of Solana swap platform Titan in a Wednesday noted added that crypto needs an industry-specific catalyst to restart the bull run, outside of the macro environment. That spark could be a big blockchain development, or a major project launching efforts to bring in waves of new users to the crypto ecosystem. "Until we see a big announcement like that, though, crypto will continue moving in lockstep with the wider market sentiment," Chung said.
10X Research released a similar note earlier in March, warning of a potential drop to $73,000. The firm noted that retail traders loaded up on memecoins during bitcoin's postelection rally to record highs in January. However, that was likely a market top that began to crumble, with many portfolios holding falling meme coins. At the time 10X said that bitcoin would need a refreshed narrative to power the next major upward swing, agreeing with Chung's sentiment.
Bitcoin and Tariffs
So how would tariffs affect bitcoin? James Butterfill, head of research at CoinShares, in a February note wrote that in the short term, tariffs would be a negative for bitcoin.
"Unlike gold, bitcoin has a growth component, meaning it reacts to economic trends and liquidity cycles," according to Butterfill.
Initially, tariffs could slow economic growth, which would reduce demand for risk assets like bitcoin. Inflation would also increase, leading to speculation on higher interest rates. Tariffs could also cause a temporary price drop, as crypto often correlates with stock markets.
However, the long-term picture is a bit more positive. "At some point, the market will realize that the U.S. can't keep raising interest rates while the economy weakens (stagflation.)," Butterfill wrote. "When that happens, bitcoin will likely rebound, while stocks continue to struggle."
Bitcoin, Crypto Price Action
Bitcoin rose near near $85,700 early Wednesday, continuing to rebound from its weekend low below $81,500, according to CoinMarketCap data.
Ethereum traded around $1,877, off its Tuesday high near $1,920.
The iShares Bitcoin Trust and other spot bitcoin ETFs climbed 1% Wednesday, following their 3% advance on Tuesday.
Coinbase rose 2.7% Wednesday, looking to add to its 1.3% gain on Tuesday.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
