Crypto Markets Rebound 2% After Trump Tariffs, Await Economic Data

Crypto markets experienced significant volatility in the lead-up to the recent tariff announcement by President Donald Trump, who imposed a minimum 10% fee on all imports to the country. Major tokens such as bitcoin (BTC), ether (ETH), Solana’s SOL, and xrp (XRP) initially surged ahead of the speech but subsequently slumped as global markets fell, erasing all gains from the start of the week.

Following the tariff announcement, markets have shown signs of recovery, with BTC stabilizing above $83,100, ETH reclaiming $1,800, and XRP, SOL, and ADA rising over 2%. This uptick in prices suggests a potential near-term bounce for these cryptocurrencies, as attention shifts from tariffs to new economic data and potential rate cuts.

Investors had transferred larger volumes of Bitcoin, ETH, and XRP into exchanges ahead of Trump’s speech, indicating a growing intent to sell. This was reflected in the surge of Bitcoin transactions to as much as 2,500 BTC in a single block just hours after Trump began speaking. Similarly, ETH inflows into exchanges spiked to an hourly peak of approximately 80,000 ETH, and XRP transfers into Binance jumped to 130 million in one hour, up from under 10 million XRP per hour throughout most of the previous day.

These rising exchange inflows indicated investor willingness to exit positions amid growing economic uncertainty. Demand for Bitcoin and ETH declined in the perpetual futures market as traders closed their long positions to take profits. However, with the tariff announcement behind us and new economic data set to be released, markets could see a short-term relief.

Attention is now focused on the non-farm payroll report, scheduled for release. This monthly U.S. economic indicator provides insights into job creation, unemployment trends, and wage growth, offering a glimpse into the overall economic health. Markets react strongly to this data, with a higher-than-expected report potentially boosting stocks and the dollar, while a weak report may spark sell-offs and lower yields, hinting at slowdown or recession risks.

Investors are bracing for signs of softness in the U.S. labor market. A weaker-than-expected print would bolster the case for further Fed rate cuts this year, as policymakers attempt to cushion a decelerating economy. Data shows markets are pricing in four rate cuts in 2025 — 0.25 bps each in June, July, September, and December. Rate cuts occur when a central bank, like the Federal Reserve, lowers interest rates to stimulate economic growth by making borrowing cheaper.

Bitcoin and the broader market tend to react positively to rate cuts, as lower rates reduce the appeal of traditional investments like bonds, driving investors toward alternatives like BTC. Additionally, a weaker dollar can enhance BTC’s value as a hedge against inflation or currency devaluation. With positioning now light and risk assets largely oversold, the stage may be set for a near-term bounce in the crypto market.