Bitcoin Hits Record Highs Despite Trade War Developments

Markets Shrug Off Trade Tensions

Despite escalating trade tensions, financial markets appear largely unfazed. This week, President Trump announced plans to impose new tariffs of approximately 50% on copper imports, as well as a similar rate on imports from Brazil. In response, Brazil threatened to impose retaliatory tariffs on U.S. goods.

Surprisingly, these developments have had little impact on investor sentiment. The VIX Index, a key gauge of market volatility, showed no significant spike. Instead, appetite for riskier assets increased, with stock indices advancing and the U.S. dollar weakening by approximately 0.07% yesterday. Notably, Nvidia’s valuation surged to $4 trillion, making it the first company to reach this market cap milestone. Meanwhile, Bitcoin prices broke above $112,000, reaching an all-time high, supported by rising institutional interest and optimism around President Trump’s pro-cryptocurrency stance.

Expectations of a U.S. Interest Rate Cut

Minutes from the latest Federal Open Market Committee meeting revealed that members are concerned the Trump administration’s tariffs could fuel sustained inflationary pressure. While the majority agreed that interest rates should remain unchanged for now, there is an openness to potential rate cuts later this year.

However, opinions within the committee diverged regarding the timing and extent of such cuts. Some members support beginning rate reductions as early as the July meeting, while others argue that current inflation levels still above the Fed’s long-term target do not warrant any cuts this year.

President Trump disagrees strongly with the Fed’s cautious stance. He has called for an aggressive 300-basis-point rate cut, arguing that inflation remains too low to justify the current interest rate environment.

Bitcoin Breaks Further Barriers

On June 23, Bitcoin tested its 50-day moving average but managed to close above it, signaling resilience in the ongoing uptrend. The bullish momentum continued into this week, with Bitcoin reaching a new all-time high, breaking above the $112,000 level.

Bitcoin is currently trading within a zone between $112,000 and $105,141. A daily close above the high end of this zone reinforces the bullish outlook and could pave the way for a move toward $120,000. In this scenario, the psychological resistance level at $115,000 should be closely monitored.

Levels to Watch in a Bearish Scenario

Failure to close above $112,000 may indicate a lack of buying interest, potentially encouraging sellers to push prices lower towards the low end of the current trading zone. A daily close below $105,141 could trigger a corrective move toward $93,512. In this case, the support zone between $100,000 and $98,240 should be considered.

Bitcoin Daily Price Chart

Chart Source: ADSS Platform