The crypto markets are feeling acute pressure due to the trade war between the US and other countries. An analysis of indicators suggests a pessimistic sentiment among traders.
Current State of the Crypto Market
Key market indicators suggest that traders are exercising extreme caution. On Friday, April 4, funding rates on most centralized and decentralized exchanges dropped below the 0.005% threshold, indicating strong bearish sentiment in the market. Additionally, liquidation rates have decreased by 42% over the past 24 hours. However, this may indicate that traders are sitting on the sidelines and hedging against losses, which is also reflected in the sharp decline in trading volumes, which fell by 22.71% to $247.6 billion.
Concerns Surrounding Bitcoin
The market is showing other signs of distress. On April 3, the crypto fear and greed index was at a level of 25, indicating 'extreme fear.' Bitcoin (BTC), which fell to $81,000 after the announcement of tariffs, is facing a 'death cross' — an indicator of high volatility. This situation creates a lot of negative expectations.
International Community's Response
The trade war has escalated following the April 2 announcement of tariffs on virtually all goods imported into the U.S. President Donald Trump announced minimal tariffs of 10% on all foreign goods, with a 34% tariff specifically on China. In response, several countries, including China and the European Union, are preparing retaliatory measures, causing traders to worry about potential increases in consumer prices, disruptions in global supply chains, and the possibility of a recession.
In light of the escalating pressure from the trade war, the situation in the crypto markets raises serious concerns. Traders should closely monitor changes to adapt to new economic realities.
