According to recent reports, the biggest danger looming over Bitcoin bulls for the next two months is the perpetual state of tariff uncertainty caused by US President Donald Trump. This poses a considerable risk for those heavily invested in Bitcoin, warns a senior crypto analyst.
Swyftx’s chief analyst, Pav Hundal, conveyed his concerns to Cointelegraph, stating, “The primary risk for bulls at this moment is the potential stagnation over the forthcoming two months, as we seem to be ensnared in this continuous cycle of infinite tariff ultimatums.”
Hundal suggested that US policymakers might postpone monetary loosening until they obtain “concrete data” on the ramifications of Trump’s tariffs, which could potentially trigger a “slowdown in growth”. On May 7, the Federal Reserve’s rate-setting committee retained the rates within the 4.25% to 4.50% bracket due to the escalating risks of increased unemployment and inflation.
Hundal expressed concerns that maintaining this uncertainty could overshadow risk-on markets. He added, “If bears have their triumphant moment, Bitcoin could potentially slump below $100,000.”
When Trump first broached the topic of tariffs in early February, Bitcoin experienced a drop below $100,000, with its volatility influenced by decisions regarding trade policy, pauses, and announcements. It hovered below this level for more than three months until May 8.
On May 28, the US Court of International Trade restrained Trump from imposing his tariffs, arguing that he transgressed his authority. Nevertheless, Trump recently amplified tariffs on foreign steel and aluminum to 50%.
Hundal voiced that this uncertainty might have put the inflation target for the year in jeopardy. He remarked, “Just six months ago, a 2% inflation target seemed achievable; now, it’s under long-term risk from tariffs.”
However, Hundal noted that the ideal outcome would be the cessation of “tariff posturing”, which could pave the way for Bitcoin to attain $120,000 in June. Bitfinex analysts had previously predicted that Bitcoin might skyrocket to new peaks above $115,000 in July if institutional purchasing persists and US job data underperforms expectations.
The analysts opined that a “less than anticipated” report could bolster the “disinflation narrative” and prompt the Federal Reserve to contemplate reducing interest rates earlier, which would be advantageous for Bitcoin.
Disclaimer: This article does not provide investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
