Bitcoin investors are facing a significant challenge over the next two months due to ongoing tariff uncertainty from Donald Trump. Analyst Pav Hundal warns that this cycle of "endless tariff ultimatums" could hinder Bitcoin's growth, potentially pushing its value below $100,000 if the uncertainty persists.
Tariff Uncertainty Looms Over Bitcoin
Swyftx lead analyst Pav Hundal has identified the persistent tariff uncertainty from Donald Trump as the primary risk for Bitcoin bulls in the coming two months. He states that the biggest threat is a continuation of the current cycle of "endless tariff ultimatums," which could prevent any significant positive movement in the market.
Economic Implications and Federal Reserve's Stance
Hundal suggests that US policymakers might delay monetary easing until they have "hard data" on the impact of Trump's tariffs, potentially leading to a "growth slowdown." The Federal Reserve, on May 7, maintained interest rates between 4.25% and 4.50% due to concerns about rising unemployment and inflation. This cautious approach by the Fed, coupled with tariff uncertainty, casts a shadow over risk-on markets like Bitcoin.
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Key Takeaways:
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Ongoing tariff uncertainty from Donald Trump is the biggest threat to Bitcoin bulls for the next two months.
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US policymakers may delay monetary easing, risking a "growth slowdown."
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The Federal Reserve is maintaining steady interest rates due to inflation and unemployment concerns.
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Bitcoin could drop below $100,000 if uncertainty persists.
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An end to tariff uncertainty could see Bitcoin reach $120,000 by June.
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Historical Volatility and Future Outlook
Bitcoin previously dropped below $100,000 in early February when Trump first raised tariff issues, remaining volatile for over three months. Although the US Court of International Trade blocked Trump's tariffs on May 28, citing overstepped authority, Trump recently doubled tariffs on foreign steel and aluminum to 50%. This ongoing uncertainty has jeopardized the 2% inflation target for the year, which Hundal notes looked achievable six months ago.
Potential for Bitcoin's Surge
The best-case scenario, according to Hundal, would be an end to the "tariff sabre rattling." This would create a "glide path" for Bitcoin to reach $120,000 in June. Bitfinex analysts also anticipate Bitcoin surging to new all-time highs above $115,000 in July, provided institutional buying continues and US job data is "weaker-than-expected." A softer job report could reinforce the "disinflation narrative," encouraging the Federal Reserve to consider earlier interest rate reductions, which would be bullish for Bitcoin.
Sources
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Bitcoin bulls may face Donald Trump ‘tariff ultimatums’ trap, Cointelegraph.
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Bitcoin bulls’ biggest threat is 2-month ‘tariff ultimatums’ trap: Analyst — TradingView News, TradingView.
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