Tariff Shock and Hot Inflation Data Derail Bitcoin Rally

The Bitcoin rebound over the past three weeks has faltered, as hotter-than-expected core PCE data signaled rising inflation—driven in part by Trump’s tariff implementation— which appears to be weighing on consumer sentiment.

One-year inflation expectations jumped to 5.0%, undermining risk assets and triggering a stop-out of our short-term tactical bullish stance.

We now expect Bitcoin to break below $80,000 this week, particularly with multiple risk-off catalysts likely to pressure equities and spill over into the cryptocurrency market.

While Trump initially hinted at a measured tariff approach, his rhetoric has shifted toward a more aggressive stance.

Initially, there was an assumption that implementing the tariff would take time, allowing room for negotiations.

However, that narrative shifted last week, with growing concern that tariffs may be imposed first, followed by a drawn-out negotiation process.

This reversal has significantly heightened market uncertainty.

A soft ISM Manufacturing PMI could exacerbate market stress, and if U.S. employment data remains robust, it may delay any Fed intervention, leaving markets vulnerable.

Notably, the VIX remains low, suggesting that many traders are underestimating near-term downside risks.

Read our 'Major Crypto Drivers in the Weeks Ahead' Report: https://mail.10xresearch.co/p/major-crypto-drivers-in-the-weeks-ahead-5e29

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