Three weeks after Trump's tariff policy was disclosed, the risky asset market continues to show uncertainty.
Last week, Bitcoin prices repeatedly moved between $83,200 and $86,000. The breakdown of negotiations with the European Union (EU) was a negative factor in the first half of the week, while Federal Reserve Chair Jerome Powell's view that there might be no interest rate cuts this year acted as a negative factor in the latter half of the week.
Cryptocurrency-related products from traditional financial markets, which drove Bitcoin prices last year, were sluggish this week as well. This is due to ongoing economic uncertainty negatively affecting financial investor sentiment.
According to CoinShares, approximately $795 million flowed out of cryptocurrency-related products last week. This is about three times the outflow of $172.69 million from the previous week.
When comparing the Nasdaq index and Bitcoin trends this week, Bitcoin is slightly ahead. However, it is true that its appeal falls far short when compared to gold.
Bitcoin's price has been unable to definitively break through the $85,000 level for three months now. In contrast, gold, the original safe-haven asset, is approaching its all-time high by surpassing the $3,300 level.
Given the situation, analysts who had predicted Bitcoin's inevitable rise are changing their stance. Criticisms are emerging one by one that 'that prediction was wrong' regarding the global M2 increase, which was a strong basis for Bitcoin reaching $200,000 by year-end.
Recent on-chain data also shows that whale investors are reducing their Bitcoin positions. Altcoins go without saying. As the market freezes in fear, Bitcoin's share of the total cryptocurrency market capitalization has surpassed 64%, which is the highest level in the past four years.
Mantra (OM) Plummets 90% in One Hour... Chaotic Altcoin Market
The altcoin market freezing was also partly due to the Mantra (OM) crash that occurred early in the week. OM is one of the representative coins in the Real World Assets (RWA) sector. On the 14th, it suddenly experienced a 90% crash.
A coin of OM's scale dropping more than 90% in a day is unique only to the Terra-Luna incident in 2022.
However, while Terra-Luna was a financial accident that occurred after encouraging staking with unsustainable interest rates, OM's crash differs in that it was caused by a specific whale investor disposing of a large number of tokens in the market at once.
So far, insider activities, OTC trading, large-scale selling using futures markets, and panic selling by general investors have been identified as causes of the token price crash.
Mantra's CEO announced that he would burn all team tokens to restore trust after the OM crash. This momentarily caused a 25% price rebound, but as no follow-up measures were taken, the token price fell back to the levels during the crash. The OM decline is expected to continue for the time being.
Tariff Negotiation Settlement is Key Positive News... US Corporate Earnings Reporting Season Begins
The market logic these days is relatively simple. The market perceives a reduction in US tariff-related uncertainty as a positive sign. The most anticipated news is that dialogue or negotiations with China are in progress.
If the two countries somehow reach an agreement, the tariff situation can be somewhat calmed. If news of tariff negotiation progress with China or Japan emerges this week, Bitcoin might rise above $85,000 for the first time in a while.
For macroeconomic factors, attention should be paid to the Conference Board Leading Economic Index on the 21st (Monday) and the University of Michigan Consumer Sentiment Index on the 25th (Friday). Especially since the University of Michigan Consumer Sentiment Index has recently recorded a very high short-term level, a slightly favorable outcome could serve as a catalyst for price recovery.
The most influential factor for risky asset prices is expected to be Tesla's earnings report on the 22nd (Tuesday). In addition to Tesla, major companies like IBM (23rd), Google (24th), and Intel (24th) are scheduled to release their earnings reports. We wish our readers successful investments this week as well.
