There are signs that the Bitcoin bottom is in, following a local downward trend that has been active since 20 January this year. In that time the $BTC price lost as much as $32,000, equating to around 30% of its overall value. Is Bitcoin about to start clawing its way back to the all-time high?
U.S. trade tariffs about to take effect
Wednesday 2 April is dubbed “Liberation Day” by U.S. President Donald Trump. This is the day when the U.S. announces its plan for reciprocal tariffs on all countries that have standing tariffs imposed on U.S. goods, with an emphasis on countries with which the US has large trade imbalances.
Not content with this, the U.S. will also impose a 25% tariff on all imported cars and auto parts that enter the country. This takes effect on 3 April.
While there is still uncertainty as to how this will play out, not just for the U.S. domestic market, but also for global trade, at least the market will know the main extent of the U.S. strategy on tariffs by the end of this week, and then the market will have a better opportunity to price everything in.
Has the S&P 500 dipped enough?
The S&P 500 has lost as much as 10.6% from top to bottom during these last seven weeks since the talk of impending tariffs unsettled the market. This is the biggest dip since 10.8% in October 23, and is now more than the 9.7% reversal of the Japanese carry trade crash in August 2024.
Could this current reversal continue on down as tariff reprisals start to come in from the likes of the European Union, Canada, and others? Yes, but the main thing is that these will shortly be known. The market will have the vast majority of its doubts clarified, and the current stock market dip may already have accounted for this.
Gold tops as Bitcoin begins its rise
With this crisis arguably about to subside, with liquidity entering the system from the likes of China, and a slackening of QT from the US, the stage could be about to be set for a resurgence from Bitcoin. With the gold price having reached $3,150, a top may be fast approaching, while the converse is true of Bitcoin, which has now perhaps found a bottom.
Source: TradingView
In the weekly chart above for BTC/GOLD, it can be seen that $BTC has now come down to the ascending trendline. This was a nearly 35% reversal against $GOLD, but should the bounce take place from here, it will be a very clear higher low, to add to the long sequence of higher highs and higher lows made since the beginning of the Bitcoin bull market which began in January 2023. The Stochastic RSI at the bottom of the chart is also very much in Bitcoin’s favour.
$BTC trend change taking place?
Source: TradingView
The short-term chart for the price of $BTC (BTC/USDT) shows that the price is currently trying to battle with a horizontal resistance level before moving up to the descending trendline once again.
With the last vestiges of U.S. stock market uncertainty still to play out during this week, it may be that there is some further choppiness to contend with. However, if the bulls can push the price up to, and beyond the descending trendline, a higher high at $88,800 will be the next target on the road to a trend change.
Of course, there is still the strong support at $80,000 to come back down to should things turn uglier than expected over the tariff wars.
Bitcoin 2-week chart
Source: TradingView
In the 2-week chart, which shows the entirety of this bull market, it can be seen that perhaps the price is ready to break through that descending trendline. Also, at the bottom of the chart, the Stochastic RSI may be making its lowest bottom of the bull market. With 12 days left in this period, this is a possibility. It just remains to be seen whether the price will jump straight back up, or whether it will chop sideways like it did during the 8-month bull flag. How the indicators in the Stochastic RSI rise from the bottom will have a say in the strength of the next upswing.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.