Trump’s Shock Tariff Triggers $660 Billion Blow: How Will Bitcoin Price React?

Bitcoin traders are anticipating increased volatility and uncertainty after Donald Trump announced a surprise “Liberation Day” tariff, signaling that the specter of recession is looming in the background. For example, Kalshi increased recession odds to 53%, and Polymarket has them at 54%. Many large financial institutions, like Goldman Sachs and JPMorgan, have even revised their economic outlook to caution that economic turbulence is on the horizon. With inflation concerns and uncertainty surrounding the Federal Reserve’s potential policy decision and its effects on markets, Bitcoin’s relevance as a safe haven and risk asset will soon be tested.

Trump’s Tariffs, Inflation, and a Shaky Economy

The recent Trump tariffs, which impose a 34% tax on Chinese imports and a 20% duty on goods from the EU, have created turbulent reactions for markets. JPMorgan has researched that these tariffs could add $660 billion in costs to American consumers, which would raise inflation by another 2%. As a result, economists are increasing their recession warnings; Goldman Sachs now puts the chances of recession at 35%, up from 20% previously. Investors are still uncertain about how all markets, including Bitcoin, will react in the coming months.

What This Means for Bitcoin

The key uncertainty today is whether Bitcoin will act as a haven or track the traditional risk markets down. Some traders, such as Bob Loukas, think BTC will struggle in a risk-off scenario, although they could be wrong. Other traders argue that a dovish Federal Reserve, cutting rates to balance weakness in the economy, will help the BTC price move higher. 

Federal Reserve Chair Jerome Powell will be speaking on Friday. All eyes will be on the potential signal of support for easing financial conditions. Regardless of the scenario) It seems like Bitcoin’s direction will be dictated by changes in the macro economy, and 2) Traders will have to strap into their seats! 

BTC Price Action Analysis

A tumultuous trading session is depicted by the 5-minute chart of the price movement of Bitcoin, which first stays within a trading range before falling lower and challenging the support level at $81,800. Near this level, the price stabilized and matched several oversold RSI signals that indicated a possible reversal. As a result of the MACD’s golden cross confirmation, prices rose above the crucial support level. Then, when higher highs and higher lows developed, Bitcoin entered an ascending channel, signaling a sustained rebound. But the upward momentum is capped by the resistance level around $83,800, which has not been broken.

Chart 1, Analyzed by Alokkp0608, published on April 4th, 2025

Overbought situations on the RSI caused pullbacks, while modest death crosses on the MACD indicated brief corrections. The price of Bitcoin is currently fluctuating between support at $82,300 and resistance around $83,500, staying within the rising channel. The MACD indicates waning positive momentum, but the RSI remains in the neutral area. A drop towards the support, or about $82,000, may occur if the price is unable to maintain the channel’s lower border. However, sustained upward momentum can push Bitcoin closer to the $84,000 resistance level. Since Bitcoin continues to react to macroeconomic and wider market circumstances, traders should keep an eye on these price levels. 

BTC Price Outlook: Recession Fears vs. Bullish Momentum

Bitcoin is still vulnerable amidst macroeconomic uncertainty and an unpredictable market. With Trump focusing on tariffs and the economy potentially moving towards recession and uncertainty in Federal reserve policy, traders will be faced with a difficult environment. The BTC Price action analysis reflects this uncertainty as Bitcoin is struggling with resistance near $83,800, fluctuating within an ascending channel. 

If Bitcoin can break above $83,800, it could push BTC towards $84,000, but if it cannot hold support, it could drop to $82,000.As Powell gets ready to speak, Bitcoin’s reaction will depend on changes in liquidity and the broader market. Traders should monitor the levels of support and resistance to see if price swings will happen as Bitcoin continues to be reactive to macroeconomic uncertainty and the broader market.