Trump's tariff announcement shakes markets, BTC dips

Wednesday's tariff announcement triggered one of the most confusing market reactions this month. BTC spiked on headlines suggesting a "universal 10% tariff" - only to reverse minutes later once reciprocal tariffs were announced and clarified.

What Trump announced wasn't a blanket tariff - it was a reciprocal system. Each country will be treated case by case. If they tax US goods, the US will now tax theirs, but with a "discounted" rate. This was a more aggressive move than markets expected - and it wasn't good for risk assets.

At the moment of announcement, BTC pushed hard into $88k before reversing sharply - exactly where we had been targeting our Short box. The entire move played out within minutes.

Below, we break down exactly what this means going forward, how the market misunderstood the announcement, and how we're positioned for what comes next.

This report will be focused on yesterday's tariff announcements from President Trump and how they might impact markets going forward.

• Expectations Going Into The Announcement.
• What Was Announced and What Was The market's Reaction?
• What's The Outlook Going Forward?
• Cryptonary's Take.

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

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Expectations going into the announcement

Going into the Trump Tariff announcement, nobody really knew what was going to be announced or rather, the level of aggressiveness of the tariffs. What was known was that tariffs were going to be announced, and everything else was essentially an unknown.

Our expectations were that we were going to get aggressive tariffs. Our reasoning was that this was something that Trump has spoken about for decades, ie, how unfair other countries were to US trade.

If you then pair this with Trump's negotiation style, he goes aggressive from the off, which essentially brings all parties to the negotiating table, and they then settle somewhere in the middle. Hence, we expected the first announcement of tariffs to be aggressive, as that would then bring other parties (other countries) to the negotiation table.

Aggressive tariffs are exactly what we got. Let's get into it.

What was announced, and what was the market's reaction?

The initial announcement from Trump was a universal tariff of 10%, to be implemented on April 5th. Markets quickly ripped higher off the back of this as expectations were for 15% or 20%.

So, 10% would have been seen as Trump being soft, and 10% would have undermined his firmer stance that he had been portraying going into the announcement. Hence market initially rallied off the back of this.

It was a quick risk-on move across the board. If we look at BTC's price action on the 15-minute timeframe, we can see how this risk-on move played out in real time. Price shot up from $86,400 to a local high of $88,500 (yellow circle)

BTC's 15min timeframe as Trump announced 10% universal tariffs

However, we can see that the price swiftly reversed. This was upon Trump announcing reciprocal tariffs on nations ('bad actors') that tax the US. These tariffs were roughly half the value that the US calculates it is being taxed by that country.

For instance, if the Trump administration calculates that a country is taxing the US at 60%, Trump imposed a 30% tariff back on that country. This put tariffs on China at 34% (huge), and on the EU, 20% (also big).

These tariffs would be implemented on April 9th. Notably, Canada and Mexico were left out of the reciprocal tariffs, potentially suggesting that negotiations are taking place and they're probably moving ahead in a smooth way that Trump is happy with.

These tariff numbers were more than what analysts expected, and hence we saw a broad risk-off move immediately after Trump showed the reciprocal tariff chart:

• BTC down.
• Nasdaq down.
• Bond Yields are down.

NDX 1D timeframe:

US10Y bond yield 1D timeframe:

Yields down, a signal of risk-off.

What's the outlook going forward?

In some ways, the aggressiveness (how high these tariffs are) of these tariffs makes our job of analysing this slightly easier. This high level of tariffs likely leads to a real slowdown in economic growth.

And corporations aren't likely to pick up and change their supply chains just yet, because they're probably not taking these tariffs as the final number, but rather this high number (for the tariffs) is more likely a starting point for negotiations.

This does, however now open the door for multiple rounds of negotiation between the Trump administration and other countries. So, we're likely to see a continuation of the uncertainty that has hurt markets for more weeks and months going forward.

In our view, it's likely that markets get worse before they get better. This'll likely be due to the continued uncertainty, and remember, other countries may retaliate to these tariffs, or at a minimum, talk tough before they get to the negotiation table.

Cryptonary's take

Ultimately, this is still very 'up in the air', and markets do not tend to react well to this (uncertainty). In the coming weeks, we may see some positive headlines of smaller nations looking to negotiate/deals, but we might also see larger nations have a firmer stance, at least initially.

This likely sees the market remain range-bound at best, but more likely a slow chop lower over the coming weeks/months. Our expectation is to see a continuation of risk-off.

But we also appreciate that any substantially positive headlines (trade deals, positive negotiation talks, etc) could result in swift relief rallies amongst this wider chop lower than we're expecting.

For those who aren't looking for trades, remaining on the sidelines for now is probably the best course of action.

However, for those who are more active, we'll continue to look for Shorts into any relief rallies. Our targets will be altcoins with poor fundamentals that are moving into new highs or into resistance levels.

For Bitcoin, we continue to hold the BTC Short from the box range of $86,300 to $91,700. My (Tom) personal entry is poor - I looked to get too aggressive with the trade slightly too early - hence I have a lower average entry price. But even with that, we're still in profit, and so many of you should therefore be in greater profits than I currently.

For this trade, it's an ever-changing environment here, but we're still skewed bearish as we're in an unfavourable macro and liquidity environment, and therefore we continue to hold the trade.

We expect the price to move down to $82k, and that'll then be the retest of support again. How the price behaves will be important. If price breaks lower (and that's what we'll be looking for), the $78k is the next target, and we may consider booking some profits at that level.

This is a news/event-driven market, and so we'll continue to have our fingers on the pulse. So far, we've made some good calls on the macro front, and we look at the situation in front of us, and we still see that we're on the right side of it.

BTC trade result so far: