The price of Bitcoin may rise even as the global trade war continues.

Crypto and stock traders hope for a last-minute solution that could prevent the U.S. from imposing a 104% tariff on Chinese goods imported into the country, but in a press briefing, the White House confirmed that the tariffs will take effect on April 9.

The market worsened as Peter Navarro, President Donald Trump's trade advisor, stated that tariffs "are not a negotiation."

As a result, the S&P 500 index closed on April 8 with a decrease of 1.6%, reversing a previous increase of 4%. This decline has traders wondering whether Bitcoin can regain its upward momentum amid deteriorating macroeconomic conditions.

The public debt issues of the United States continue, paving the way for the rise of Bitcoin

From April 2 to April 7, the S&P 500 index plummeted by 14.7%, causing panic for Bitcoin holders and forcing the asset to retest the $75,000 level – the lowest in over 5 months.

S&P 500 futures (versus) Bitcoin/USD (right) | Source: TradingViewDuring his appearance with Israeli Prime Minister – Benjamin Netanyahu on April 7, President Trump reportedly stated that his goal is to "reset the chessboard" on trade.

Trump added that: "there could be permanent tariffs and there could also be negotiations because there are things we need beyond tariffs."

According to Yahoo Finance, in this context of instability, IPOs and mergers have been delayed, while leveraged loan transactions and bond sales have been sidelined.

It is clear that the stock market has the potential to recover if the risks of a trade war subside. Economists warn that tariffs could lead to inflation and significantly increase the likelihood of an economic recession.

However, assessing the impact on Bitcoin's price remains a challenging task. This is because some investors view the fixed monetary system of crypto as a hedge against the continuous increase in the global supply of fiat money.

Short-term correlations harming BTC, but the possibility of interest rate cuts could reverse the situation

In the short term, the positive correlation between Bitcoin and the stock market is expected to continue. However, the financial challenges of the U.S. government create potential opportunities for Bitcoin prices to grow.

On April 8, the yield on the 10-year U.S. Treasury bond rose to 4.28%, after dropping to 3.90% on April 7. The increase indicates that investors are demanding higher returns to hold these assets.

! U.S. dollar index (DXY, side trái) against U.S. 10-year Treasury yields (bên phải) | Source: TradingViewThe rising cost of extending the federal government's $9 trillion payment is due within the next 12 months, which is expected to upset fiscal balances and weaken the dollar.

The US Dollar Index (DXY) has decoupled from the US Treasury bond yields, falling to 103.0 on April 8 from 104.2 on March 31. This situation is likely to support Bitcoin prices. This view was also shared by BlackRock CEO Larry Fink in a letter to investors on March 31.

Michael Gapen, an economist at Morgan Stanley in the United States, stated in a note to clients on April 8 that, "We think that, with the current stance, the Fed should wait and observe longer in order to make the right decision," according to CNBC.

According to an updated forecast from Morgan Stanley, the U.S. Federal Reserve (Fed) is expected to keep the interest rate at 4.25%-4.50% until March 2026, adding that "only a recession would change the calculations" and "a recession could mean earlier and more cuts right from the start."

Bitcoin's momentum is likely to turn positive as traders realize that the Fed has limited tools to avoid a recession without risking inflation.

Although the exact timing of the upcoming breakout is still uncertain, the prolonged delay in resolving trade war issues may drive investors toward scarce assets like Bitcoin, especially in the context of concerns about the potential devaluation of the USD.

You can see the BTC price here.

Disclaimer: This article is for informational purposes only and is not investment advice. Investors should conduct thorough research before making decisions. We are not responsible for your investment decisions.

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Viet Cuong

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