Bitcoin Faces 10% Drop Risk Due to Trump Tariff Uncertainty

Bitcoin bulls are currently facing a significant challenge due to the ongoing tariff uncertainty stemming from U.S. President Donald Trump's policies. According to Swyftx lead analyst Pav Hundal, the most substantial risk for Bitcoin investors over the next two months is the potential for a prolonged cycle of tariff ultimatums, which could trap the market in a state of uncertainty.

Hundal warns that if U.S. policymakers delay monetary easing until they obtain "hard data" on the impact of Trump's tariffs, it could lead to a growth slowdown. This delay could cast a shadow over risk-on markets, including Bitcoin. If the uncertainty persists, Hundal predicts that Bitcoin could drop back below $100,000, giving bears a chance to claim their "I told you so" moment.

The tariff issue first surfaced in early February, causing Bitcoin to drop below $100,000 and remain volatile due to trade policy decisions, pauses, and announcements. The U.S. Court of International Trade blocked Trump from imposing his tariffs on May 28, but Trump recently doubled tariffs on foreign steel and aluminum to 50%. This ongoing uncertainty has jeopardized the chances of reaching the inflation target this year, according to Hundal. He notes that the U.S. is at a macro crossroads, with the Federal Reserve walking a tightrope.

Hundal suggests that the best-case scenario would be an end to the "tariff sabre rattling," which could create a "glide path" for Bitcoin to reach $120,000 in June. Earlier, Bitfinex analysts had predicted that Bitcoin could surge to new all-time highs above $115,000 in July if institutional buying continues and U.S. job data is "weaker-than-expected." A softer-than-expected report could reinforce the "disinflation narrative" and encourage the Federal Reserve to consider reducing interest rates sooner, which would be bullish for Bitcoin.

However, the ongoing trade tensions between the U.S. and China, along with the threat of a 25% tariff on U.S.-bound iPhones and other goods, have put pressure on businesses and investors. The tariffs are seen as a major risk factor for businesses and could potentially impact the global economy. Investors should be aware of this risk and take appropriate measures to protect their investments.