Trump Tariffs Spark Market Mayhem: Will Bitcoin Price Soar or Crash Amid Federal Reserve Warning?

Tariffs imposed by Trump have caused disruption in global markets as the Federal Reserve is also warning of the potential economic implications of such tariffs. Chairman Powell observed that the tariffs are adding inflationary pressure, thus reducing growth, making it even more challenging for the Fed to make its policy considerations. At this juncture, the superimposition of trade-related dynamics, central bank dynamics, and cryptocurrency trends are providing an unusual intensity of focus to the global financial markets.

Trump Tariffs, Fed Inflation Warnings, and Bitcoin’s Volatile Dance Amid Market Chaos

The latest Trump tariffs have increased economic uncertainty, and Federal Reserve Chair Jerome Powell warned against long-term risks for inflation and slow growth. On April 4, the United States, during a speech by Powell, noted that the reciprocal tariffs could derail the Fed’s 2 percent inflation target and will complicate decisions about monetary policy as markets price into expectation for rate cuts, price pressures persisting. This occurred while the stock market was plummeting historically at $3.5 trillion, following a spur by escalating economic tensions between the United States and China and then Trump’s urging to implement rate cuts immediately. 

Bitcoin, whose price has garnered all attention with amazing tenacity even during the swings of the traditional market, declined by an initial 8.5% after the Trump tariff announcement but climbed to $84,720 as equities collapsed. As such, Bitcoin gains its independence from what analysts like Cory Bates call traditional asset correlations, while analysts like Arthur Hayes argue that tariffs help Bitcoin rise by forcing central banks to inject liquidity. Hayes adds that strong Fed rate cuts and a weak dollar may push BTC to $250,000 because of historical parallels with former quantitative easing cycles.

Bitcoin Price Of Last 24 Hours

On April 4, the day began with Bitcoin prices hovering around $83,363 amid market uncertainty pending tariffs. In the subsequent hours, Bitcoin witnessed a massive sell-off, only to recover as investors fled toward safer assets amidst swirling clouds of economic uncertainty. The trading session started with Bitcoin consolidating at $83,102.83, awaiting further economic indicators and the response from the Federal Reserve.

Chart 1, analysed by anushrivarshney2613, published on TradingView, April 5, 2025

There is a large possibility that Bitcoin will remain volatile as the trade conflicts and monetary policy decisions go on. Predictions say that there are chances for Bitcoin to get to the level of $126,089.43 in April 2025 due to possible catalysts with increased investor interest and geopolitical instability determining factors. If these conditions worsen in the market, it is possible for Bitcoin to test levels of support around $82,000 to $84,000. If Bitcoin breaks out above $93,000, the upside might be significant and could take it beyond even the most optimistic forecasts, as has been the case with previous bull runs. In the short term, Bitcoin would fluctuate somewhere between $82,000 and $87,000 due to market sentiment and economic headlines. 

Bitcoin’s Future Amid Trump Tariffs & Fed Warnings

The trajectory on which Bitcoin plummets remains characterized by massive dynamicity internationally on the economic front with Trump tariffs and Fed policies impinging upon the overall market sentiment. Analyst predictions are bleating that Bitcoin price will hit the $100,000 mark sometime within the next few years, even as the coin observes increasing adoption and improvements in the macroeconomics world. Powell’s inflation threats have really blighted traditional markets; Bitcoin has been construed as an insurance against the upheaval of uncertainty under high volatility. Should predictions turn out accurate, then decoupling from equities would continue with BTC prices, increasingly reaching $140,000 to $250,000 in the next five years. However, the development of this path hinges much on central banks’ decisions discussed above, in addition to the developments in the trade wars.