US President Donald Trump has announced plans to impose tariffs on all steel and aluminum imports into the US, including those from Mexico and Canada. This move triggered a downturn in the cryptocurrency market, with Bitcoin (BTC) and Ethereum (ETH) slipping 0.80% and 1.75%, respectively.
The tariffs, which include a 25% tariff on all steel and aluminum imports, are expected to increase prices of imported goods in the US, leading to higher inflation. This could prompt the Federal Reserve to keep interest rates higher for longer periods, making it less favorable for risk assets like cryptocurrencies.
Bitcoin’s open interest has dropped by approximately 7% since February 3, suggesting a reduction in leveraged positions and caution among traders. However, its weekly funding rate remains positive at 0.084%, indicating that long traders are paying a premium to short traders, reflecting a bullish bias despite the market uncertainty.
Ethereum is also consolidating within a bear pennant pattern, which typically signals a continuation of the prior downtrend. However, signs of accumulation, such as large holders buying into accumulation addresses, could invalidate this scenario and lead to an Ethereum rebound.
Source: https://www.fxempire.com/forecasts/article/bitcoin-ethereum-drop-on-donald-trumps-latest-tariff-threats-key-points-to-watch-this-week-1496540