Trade war causes continued pressure for stock markets and Bitcoin

Bitcoin is trading with a small weekly loss and looks to be under continued pressure, just as most major Western stock markets. With a looming global trade war and fears of rising inflation, investors are rather cautious at the moment. It remains to be seen whether the European Union will respond next week to the import duties imposed by the US government on foreign cars and parts.

Crypto will more than likely end the first quarter with a fairly large loss compared to the beginning of the year, as will most stock markets. The correlation between the two has clearly recovered ever since the introduction of the Bitcoin ETFs last year.

Trade war

Bitcoin and the stock markets have been testing their support lines for a few weeks now. For the largest digital currency, this means a loss of around 30% ever since the top of half December 2024 and an official correction, just like most European and American currencies, although for them a drop of 10% is enough for it to be called a correction. Ever since the introduction of the Bitcoin ETFs last year, Bitcoin, and the larger crypto market, has usually traded in tandem with the technology exchange Nasdaq.

The looming trade war between America and Europe in particular is a cause for concern for investors. After the Trump administration imposed a 25% import duty on foreign cars this week, which mainly affects the German and French economies, it is now a matter of time to see Europe’s reaction.

According to analysts at Rabobank, the EU would rather make a deal to prevent a full-fledged trade war. “But if there is no agreement, Europe will most likely retaliate,” the bank said. Bitcoin is currently trading just above $80,000 and has been threatening to retest the strong support line of $76,000 in the coming days or weeks.