The crypto market dipped while the Fear and Greed Index remained in the fear zone amid renewed trade war fears and as traders waited for key corporate earnings and the Federal Reserve decision.
Summary
- The crypto market retreated as trade risks emerged
- Trump warned that he would implement a 100% tariff on Canadian goods.
- Cryptocurrencies will also react to the upcoming Federal Reserve interest rate decision.
Crypto market dips amid trade war fears
Bitcoin (BTC) and most altcoins retreated during the weekend. BTC moved to $88,700, while Ethereum (ETH) dropped to $2,930. Other top altcoins like Dogecoin and Solana also dropped by over 1%.
The ongoing retreat happened as fears of a trade war emerged. In this case, President Donald Trump threatened to impose a 100% tariff on Canadian goods brought to the US.
Trump blamed Canada for improving ties with China and reaching a trade deal that lowered electric vehicle tariffs. Canada will lower the EV tariff of 49,000 EVs from 100% to 6%, while Canada will reduce its levy on Canada’s canola.
A renewed trade war between the two countries would have a major implication because of the trade volume between the two countries.
On the positive side, there is a possibility that TACO – Trump Always Chickens Out – will happen. Also, the Supreme Court may find Donald Trump’s tariffs illegal.
FOMC interest rate decision
The next important catalyst that may move the crypto market this week will be the Federal Reserve interest rate decision, scheduled on Wednesday.
This will be an important decision because it will set the tone for what to expect in the remainder of the year.
Economists believe that the Fed will leave rates unchanged between 3.50% and 3.75%, with a Polymarket poll placing these odds at over 98%.
The crypto market will likely rebound if the Fed hints of more cuts later this year. However, that forecast will be impacted by the upcoming changes at the bank, including the appointment of a new Chair.
Corporate earnings to impact the market
Meanwhile, the crypto market will react to the upcoming corporate earnings by some of the biggest American companies, including Magnificent 7 firms like Apple, Microsoft, and Meta Platforms.
These companies are some of the biggest ones in the world, and their earnings always have an impact on the market. For one, they are the biggest spenders in the booming artificial intelligence industry.
Strong earnings will likely push the stock and the crypto market higher by incentivizing a risk-on sentiment from Americans.
Meanwhile, traders will watch for a potential government shutdown in the United States and any progress on the CLARITY Act.
