Americas Crypto Market Outlook: Forex Trends Indicate Potential Bitcoin Gains Amid Trade Tension

By Omkar Godbole (Times are in ET unless specified otherwise) For those familiar with financial markets, terms like "risk-on" and "risk-off" are common. Now, it seems we're entering an era of "tariffs on" and "tariffs off." In a risk-on scenario, assets sensitive to growth, such as stocks and cryptocurrencies, typically increase due to expectations of economic growth or supportive monetary policies. On the other hand, risk-off situations reflect a lack of investor confidence, leading to a preference for safer assets and sell-offs. This week, President Trump's tariff announcements have significantly influenced the markets. Early on Monday, bitcoin dropped to nearly $91,000 as Canada and Mexico retaliated against Trump's tariffs, exemplifying "tariffs on" trading. However, it later rebounded above $100,000 after Trump paused the Mexico tariffs for 30 days and announced the creation of a sovereign wealth fund, sparking hopes of potential investments in BTC, which represented "tariffs off" trading. The bullish momentum lost steam early on Tuesday as China retaliated against Trump's import tax, reviving "tariffs on" trading. As a result, BTC fell over 3% to $98,000, pulling altcoins down. Nasdaq futures dropped over 0.5%, and the dollar attracted safe-haven bids. Should Trump announce a last-minute deal with China, similar to what he did with Mexico and Canada on Monday, bitcoin and the broader crypto market are likely to rebound. Foreign-exchange market activity suggests this is a possibility. The AUD/CAD is down only 0.3% for the day, indicating traders do not expect a prolonged tariff war between the U.S. and China. (The Australian dollar is often seen as a proxy for China). "Given Canada has avoided tariffs and China has not, a cross like AUD/CAD should trade significantly lower, but it's only 0.5% lower on the day. This signals that markets are pricing in a good chance that the US and China will also reach a deal and delay tariffs," ING noted in a client briefing. That being said, Trump's actions are unpredictable. Therefore, expect increased volatility and remain alert. Key Developments to Watch Upcoming Token Events Conferences: Token Talk By Shaurya Malwa Derivatives Positioning Market Trends: Bitcoin Statistics: Technical Analysis Crypto Equities ETF Flow Updates Spot BTC ETFs: Spot ETH ETFs Source: Farside Investors Overnight Flow Updates Chart of the Day While You Were Sleeping In the Ether