As the trade war escalates, can Bitcoin hold on to the $70,000 mark?

The market failed to buy at the bottom and did not wait for good news. Early this morning, the White House press secretary said that the additional 104% tariff on China had taken effect at noon Eastern Time, and the global financial markets dived again.

On April 3, when Trump's tariff policy was introduced, US Treasury Secretary Bescent issued a statement suggesting that all countries should not take retaliation and wait for any negotiations before April 9. There has even been a "fake news" drama again, hoping that Trump may be willing to negotiate trade barriers to multiple countries and specific products, and a rebound will be made to allow global capital markets to "resurrect" in a short period of time.

But after several days of game, the market has not waited for good news. From 10% at the beginning of the year to 20% in March, to 34% at the beginning of April, now with a 50% "retaliation increase", the Sino-US trade friction has escalated into an "economic nuclear war."

If China and the United States fight another trade war, can the stock

market still hold on?

Since the Trump administration announced a new round of tariff policies last week, the international capital market has suffered severe shocks, and the US stock market has been the first to bear the brunt. As of Tuesday's close, the S&P 500 fell below 5,000 points, the first time in nearly a year, down 18.9% from the high on February 19, just one step away from the threshold of a "technical bear market" with a 20% decline. It is estimated that the market value of the S&P 500 index components evaporated by US$5.8 trillion in four trading days, setting the worst four-day consecutive decline since the index was established in the 1950s.

At the same time, the US tariff policy triggered a chain reaction in the global capital market. Bloomberg statistics show that since Trump proposed the so-called "reciprocal tariffs" on April 3, the total market value of global stocks has shrunk by $10 trillion, slightly higher than half of the EU's GDP. The US technology giants have become the hardest hit area. The market value of seven major technology companies including Apple and Microsoft has evaporated by US$1.65 trillion. Among them, Apple's stock price plummeted by nearly 23% in four days due to its high reliance on overseas supply chains, marking the largest single-week decline since the outbreak of the epidemic in 2020.

Previously, many opinion leaders in the crypto circle firmly believed that crypto asset classes would not be affected by traditional tariffs because their transactions did not require crossing national borders and customs. They believe that in the face of the world entering a new era of mercantilism and trade barriers, the value proposition of cryptocurrencies has further highlighted the fact that Strategy founder Michael Saylor posted on April 3 that "Bitcoin has no tariffs."

However, the total market value of cryptocurrencies has fallen by 35% from its peak in December 2024, from $3.9 trillion to $2.5 trillion. The Crypto Fear and Greed Index is shown as 17, which is in the extreme panic range, indicating that the market sentiment is pessimistic.

Last night, Bitcoin fell below $75,000 again. At the same time, BTC's market share continued to rise, the altcoin market was terrible, and Ethereum fell below $1,400 again.

In the past 12 hours, the crypto market has accumulated a total of US$243 million in liquidated positions, of which US$192 million in liquidated positions and US$51.03 million in liquidated positions.

The continued decline in Bitcoin prices will even lead to the continued buying and buying Strategy being forced to sell Bitcoin. According to the 8-K form filed with the SEC on April 7, if the price of Bitcoin continues to fall, Strategy may be forced to sell its Bitcoin holdings to repay debts, breaking Michael Saylor's promise that "will never sell Bitcoin."

Since Trump won the election in November 2024, Strategy has bought 275,965 BTC ($25.73 billion) at an average price of $93,228, and this portion has fallen to $4.6 billion.

Pessimistic expectations are intensifying, how do analysts view the

current market

Over the past week, several Wall Street banks, including Goldman Sachs and JPMorgan Chase, warned that if the trade war continues to escalate, the U.S. and even the global economy may fall into recession this year, which will further weaken the attractiveness of financial markets.

But the White House team is cheering for victory, "It's building bottoming out now, it's really building bottoming out," Trump's chief trade adviser Peter Navarro said on Fox News on Monday night. "There will be a reversal next, and the companies in the S&P 500 that were the first to turn production back to the United States will drive a recovery, which will happen soon. The Dow 50,000 points, I dare to guarantee that there will be no recession."

However, Navarro's optimistic remarks have not been recognized by JPMorgan CEO Jamie Dimon, who warned in an annual letter to unanimous shareholders on Monday that Trump's tariffs would push up prices, drag down the global economy, and weaken its global position by undermining the U.S. allies system. Even some of Trump's allies, including Elon Musk and Bill Ackerman, have recently warned that such tariff policy logic is a wrong route.

Crypto analyst Phyrex believes that from the Fed's behavioral logic, unless inflation drops significantly, it will be difficult to quickly implement even a "defensive interest rate cut". The real watershed may be when the U.S. GDP data was released at the end of April.

From the perspective of the crypto market, BTC's turnover rate has declined today. URPD data shows that even if the price falls below US$77,000, investors in the range of 93,000 to 98,000 have hardly reduced their positions. This shows that the current selling pressure does not come from high-level holders, and there is no panic selling at the top. The on-chain structure is relatively healthy. As long as subsequent policies are no longer repeated frequently, BTC and risk markets may still have room for phased repair.

As Treasuries no longer play a safe haven, 10-year Treasury yields rebounded to around 4.3%, higher than the end-March level, pushing up the costs of mortgages and other types of loans. The 30-year U.S. Treasury yield closed at 4.76%, up nearly half a percentage point from Monday's lowest point. The spread of the U.S. biennium-ten-treasury yield curve widened to 48 basis points, the steepest level since May 2022.

BitMEX Arthur Hayes posted a statement saying, "The Fed is not left for much time and the situation is out of control. The previous decline in stock markets would cause the US 10-year Treasury yield to fall, which is beneficial to risky assets. The stock market is now falling, accompanied by the rise in US 10-year Treasury yields, which is a bad thing. The market has finally realized that if the US dollar export revenue decreases, it will be impossible to buy Treasury or stocks again, and the game is over."

Pessimistic expectations are still growing, trader Eugene said, "The introduction of global trade tariffs marks a change in the world order that has not been seen in more than 50 years. Free trade has been a key factor in driving productivity and economic growth, leading to the largest long-term bull market ever. The move from open to protectionist stance will have far-reaching effects, and this impact will take years to gradually emerge unless Trump completely abandons his tariff plan. I think the possibility is very low. This will pose a considerable long-term resistance to global risky assets.

When it comes to cryptocurrencies, the recent structural decline of active developers is probably the most worrying thing. In the last cycle, we could watch developer activity and feel comforted because we know our industry is still benefiting from long-term tailwinds. Fast forward 2-3 years later, not only did we not produce anything particularly interesting or important, but the prospects for the future were even worse than they were back then.

In the last cycle, we look forward to the launch of ETFs and a better regulatory environment under government leadership that supports cryptocurrencies as the dawn of the end of the tunnel. Now that all these have come true, but (again) failed to meet expectations, I can't see anything in the future that can help cryptocurrencies get rid of their natural "Ouroboros" (self-cycling, self-eating dilemma).

From a more macro perspective, the world situation is in a major change unseen in a century. Dalio, a billionaire hedge fund manager and founder of Bridgewater Fund, said that although the current market and economy focus on tariffs is important, deeper global issues should not be ignored. He noted that we are in the "classic collapse" phase of the monetary, political and geopolitical order, which may only happen once in our lifetime, but has occurred many times in history.

Dalio advises not to be distracted by short-term events such as tariffs, and should pay attention to the interactions of the five major forces (economic, political, geopolitical, natural, and technological). Studying similar cycles in history (such as currency crises, etc.) can help predict the future.

"The current change is part of a historic cycle, tariffs are just appearances, and the real driver is the structural collapse of the monetary, political and geopolitical order. Only by understanding the interaction of these forces and learning historical experiences can we better deal with the future."