Bitcoin remains strong despite US stocks losing $3.5 trillion due to Trump and warnings from the Fed.

In the context of the U.S. stock market continuing to decline for the second consecutive day, Federal Reserve Chairman (Fed) Jerome Powell warned that the "reciprocal" tariffs imposed by President Donald Trump's administration could have significant impacts on the economy, increasing inflation and hindering growth.

Speaking at a conference the same day, Mr. Powell stated that the Fed is closely monitoring developments and maintaining a cautious stance, noting that tariffs could push inflation up significantly in the coming quarters, making the goal of controlling inflation at 2% more difficult – just a few months after the Fed signaled a rate cut to achieve a soft landing. He said:

"Tariffs are almost certain to cause inflation to rise in the short term, and it is also possible that these effects will last longer than expected."

Just a few minutes before Powell's speech, President Trump posted on the social media platform Truth Social, publicly urging the Fed to "CUT INTEREST RATES," while also criticizing Powell for being "always delayed."

Currently, the Fed is facing a difficult choice: either maintain interest rates throughout the year or be forced to cut them early if the economy shows signs of weakening. While believing that the U.S. economy is still in a strong position, Mr. Powell emphasized:

"It is still too early to assert which direction is suitable for monetary policy."

The US labor market continues to show mixed signals: the unemployment rate in March rose to 4.2% from 4.1% the previous month, while the (Non-Farm Payrolls) added 228,000 jobs – far exceeding expectations, reinforcing confidence in economic health. The Consumer Price Index (CPI) in March increased by 2.8% compared to the same period last year, with official data to be released on April 10.

These figures indicate that the labor market remains strong, but concerns about inflation have not yet cooled – consistent with Powell's warning about the negative impact of tariffs.

On the same day, the Dow Jones index plummeted by 2,200 points, while the S&P 500 lost 10% of its value in just two days. The Watcher Guru account on X stated:

"The US stock market has evaporated $3.25 trillion just today. Meanwhile, the cryptocurrency market has recorded an additional $5.4 billion inflow."

Bitcoin can be highly volatile in the short term

Most investors predict that Bitcoin may soon undergo a period of strong volatility in the short term. Powell's remarks about the possibility of "higher inflation" and "increased unemployment rate" may cause investors to withdraw capital from traditional markets and shift to holding Bitcoin as a hedge against risk.

In fact, analysts have noted that the price of Bitcoin is gradually "decoupling" from the downward trend of the stock market. Although BTC peaked for 9 days at $84,000 on April 2 – just before President Trump announced "reciprocal" tariffs on "Liberation Day" – the price fell sharply after the press conference at the White House.

However, since then, Bitcoin has remained above the threshold of 82,000 USD, and when the US stock market plummeted on April 4, BTC surged to 84,720 USD – a price reaction contrary to the traditional trend.

Analyst Cory Bates shares the price chart and opinion:

"[…] Bitcoin is decoupling from the traditional market right before our eyes."

In the context of China responding with a 34% tariff on U.S. goods, and President Trump continuing to pressure the Fed to cut interest rates, market volatility could be a driving factor for a significant increase in Bitcoin prices as a safe-haven asset.

History shows that during the US-China trade war in 2018, the price of Bitcoin did not increase significantly throughout the year, but it experienced strong fluctuations and rose by up to 15% as tensions escalated in the middle of the year – particularly after the US imposed tariffs on Chinese goods in July, leading to retaliatory measures from Beijing.

Disclaimer: This article is for informational purposes only and is not investment advice. Investors should do their own research before making any decisions. We are not responsible for your investment decisions.

• Bitcoin is in position for a significant RSI breakout in the first 6 months above $85,000
• In the near future, Vietnamese traders may have to pay taxes on cryptocurrency transactions.
• Bitcoin's bottom is formed when the U.S. Fed eases, and Trump takes a softer stance on tariffs.

Vuong Tien

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