"Liquidity is like oxygen; it is not noticed until it is lost, which can be instantly fatal.
——Ray Dalio, founder of Bridgewater Associates--(Principles)
Principles of Great Works
Trump's car tariff measures have led to a general decline in the stock and crypto markets, exacerbating pessimism about the future economy!
The S&P 500 index is attempting to reclaim the 200-day moving average, which is around $5,700, but has failed to do so. This failure to break through is indeed a very bad sign, and we will be watching to see if the support level can remain stable around the current level.
Trump announced a 25% tariff on imported cars and car parts, which will disrupt the U.S. auto supply chain, as many American car manufacturers rely on foreign parts, leading to increased production costs. This has resulted in a significant drop in the stock prices of American automakers!
Car tariffs are also impacting the cryptocurrency market!
----causing Bitcoin to fail to establish a key support level of $88,000, which has exacerbated the recent downward trend. If this trend continues, Bitcoin could drop to the previous local low of around $76,000, and it may even break this level, setting new lows.
In several recent articles, I have maintained my view on Bitcoin's price movement: the 200-day moving average (EMA-200) support level is a key indicator, but it currently seems that this support has failed. At the same time, I also warn that as long as Bitcoin fails to reclaim $90,000, its downward trend will continue!
The American public generally believes that tariff policies may lead to rising unemployment rates or pressure on wages. At the same time, they are also concerned that tariffs will push inflation further up. Currently, the market's five-year inflation expectations are rising, and survey-based expectations have also significantly increased.
Currently, the market is relatively pessimistic about Trump's tariff policies. However, we are also curious about the reciprocal tariff policy set to be announced on April 2, wondering if it will eliminate market uncertainty and instead lead to a shift in risk assets (such as U.S. stocks and cryptocurrencies), alleviating the current downward trend.
Countries affected by tariffs may take retaliatory trade actions to maximize impact on the U.S. while minimizing negative effects on themselves. Additionally, European countries facing the same tariff threats are also likely to take countermeasures. Such a situation will undoubtedly complicate global trade relations!
Note: All content only represents the author's personal opinion and is not investment advice, nor should it be construed in any way as tax, accounting, legal, business, financial, or regulatory advice. You should seek independent legal and financial advice, including advice regarding tax consequences, before making any investment decisions.