Trump's Tariffs Spark 10.6% S&P 500 Dip, Bitcoin Awaits Market Reaction

On Wednesday, President Trump announced tariffs that will be imposed on a range of countries, effective immediately. Markets have been volatile in recent weeks due to the anticipation of these tariffs, but the announcement could restore a degree of certainty. The focus for markets is not just the news itself, but the certainty it brings, allowing them to price in potential impacts and avoid extreme volatility.

The U.S. stock market and Bitcoin, which have a strong correlation, have experienced significant declines over the past few weeks due to the uncertainty surrounding the tariffs. The market has been uncertain about the severity and scope of the tariffs, leading to a downward trend. Once the details of the tariffs are announced, the market may start to reverse its current downtrend, as the amount the stock market has already dipped could be more than what will be priced in.

The S&P 500 has dipped as much as 10.6% from its peak, but the horizontal support band from $5,635 down to $5,560 is currently holding, indicating a potential rally. The Stochastic RSI and the Relative Strength Index are also in excellent positions for a bounce. Similar scenarios are playing out in the charts of the 'magnificent seven' stocks, suggesting that trend changes are potentially just starting to take place. Bitcoin, with its strong correlation to the stock market, is also primed for a take-off.

The short-term chart for Bitcoin shows a ceiling over the price, formed by the horizontal resistance at $85,000 and the descending trendline. The bulls need some impetus in the form of a bullish event, which could potentially be the U.S. stock market spiking higher. The weekly view of the Bitcoin price shows strong horizontal support under the price, and the bulls need to break the ascending trendline and confirm above. The Stochastic RSI indicators are very close to the 20.00 level, and if passed by both indicators, momentum should lift the price higher. However, the key is the U.S. stock market and how it reacts to today’s tariffs announcement.

Bitcoin is currently in a state of flux, with analysts divided on whether the cryptocurrency will experience an upward surge or a significant decline. This uncertainty is largely due to the impending tariffs announced by President Trump, which are set to take effect immediately. The tariffs, dubbed "Liberation Day" tariffs, have sparked a range of reactions from investors and analysts alike. The market has seen a surge in Bitcoin purchases in the first quarter of 2025, with companies accumulating large amounts of BTC as it seeks to retest the $90,000 mark. However, the impact of the tariffs remains uncertain, with some analysts predicting a sharp rise in Bitcoin's price, while others anticipate a further decline. The current price of Bitcoin hovers around $85,000, with short-term price momentum poised to break in either direction.

The positive speculation surrounding the tariffs suggests that Bitcoin's price could surge with significant gains, given its recent performance since losing the $90,000 mark. However, the economic uncertainty and potential market disruptions caused by the tariffs could also lead to a decline in Bitcoin's value. Investors are eagerly awaiting the April 2 announcement, hoping for clarity on the potential impact of the tariffs on the cryptocurrency market. Despite the uncertainty, some analysts believe that the tariffs could actually be beneficial for Bitcoin. The economic uncertainty and market disruptions caused by the tariffs could drive investors towards safe-haven assets like Bitcoin, potentially boosting its price. However, this remains purely speculative, and the actual impact of the tariffs on Bitcoin's price will depend on a range of factors, including market sentiment and broader economic conditions.