Swyftx Squawk 🦜 Tariffs on Pause, Markets Surge

The drama continues! 

Donald Trump has delivered a stunning reversal to the market overnight, announcing a 90-day pause on tariffs to countries willing to negotiate with the US.  

Since then, we have seen some huge moves across the crypto market with Bitcoin +9%, while Ethereum and Solana are +15% since the announcement.  

Countries unwilling to negotiate, like China, are still going to be hit with the planned ‘reciprocal’ tariffs. In fact, Trump has overnight reinforced his stance in this trade war and increased their tariff from 104% to 125%.  

These hikes come after reports of China wanting to make a deal, which was mentioned by President Trump to the press. So why has Trump doubled down if this is the case? Is this another signature move from his aggressive negotiation tactics? Treasury secretary Scott Bessent had this to say to media about the news from China: 

“This was his strategy all along, and that you might even say that he goaded China into a bad position, [and] they responded.”  

So is that it? Has the job been done?  

While the market has taken this news very well in the short-term, it opens the door to more questions. Specifically, what if the US and China are still unable to see eye to eye? That is my current concern, as further disruptions in the trade relationship between China and the US could continue sending tremors globally.   

That being said, there is some short- and long-term data points that I will cover next to help understand what we could anticipate for crypto.  

Is this a sustainable rally? 

The big question for me is if the move we saw overnight was simply a rapid demise of the bears in the market, or, if it demonstrated clear demand for spot exposure and risk-onappetite returning.  

According to Coinglass data, the move overnight did result in an unwinding of short-positioned traders to the tune of ~$374 million USD over the last 24-hours. These short liquidation events are rapid in nature and can create vertical price pressure as positions are closed at market prices.  

Over the next few days, I’ll be observing if the market is happy to continue bidding and holding Bitcoins at these new higher prices.  

A failure to see demand likely tells us that the overnight rally might have just been a combustion of bears, and the market still wants to see more to confidently buy for the medium-to-long term.  

When everything is happening at once, it can be hard to take a step back and put things in perspective. 

That’s why next, we’ll zoom out on Bitcoin, looking at its performance since the most recent halving event.  

Chart of the week – comparing Bitcoin’s performance this cycle against previous 

When we run the performance of Bitcoin against the starting gun of halving events, we can see some interesting trends in the data.  

If you’re not sure on what the halving is, or need a refresher, I encourage everyone to checkout our video and guide over at Swyftx Learn. It’s short and will bring you up to speed.  

The below chart breaks up these network milestones, and how price has moved over the years between each event.  

There’s a few similarities and differences that we can take away from the data.  

We can see that as time has progressed the returns have diminished, with the cycle top becoming shallower each successive halving period. In fact, historically the first 400-600 days has been a significant window where these multi-year cycle tops have landed. 

So, with that in mind, we could still be early in the innings for this cycle – as we are only now coming close to the 400-day mark since the 2024 halving. 

While we have been seeing the trade war blow on in the macro backdrop, there is still time on the clock for Bitcoin. However, it’s important to note that prior performance doesn’t guarantee future outcomes.  

💱 Swyftx Flows 

The buy-to-sell ratio for unique Swyftx orders is nominally >$20,000 AUD (rolling data over the last 7 days, captured at 09:00 am AEST).  

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