Crypto Market Volatile Amid Recession Fears, Trump Tariffs

The crypto market experienced volatility on Thursday as concerns about a potential recession grew following the announcement of new auto tariffs by Donald Trump. These tariffs are set to be implemented ahead of April 2, coinciding with what Trump has dubbed his Liberation Day, when reciprocal tariffs will also be enforced. This development has led to various price predictions for BTC, ETH, and SHIB, following warnings from a prominent economist about an impending recession.

Mark Zandi, a well-known economist, has cautioned that the US economy is on the brink of a recession. This warning comes after the US Conference Board released a report indicating a significant drop in consumer confidence, which has decreased by 17 points over the past three months. Zandi's recession indicator, which triggers when consumer confidence falls by 20 points within a three-month period, is currently flashing a bright yellow and could soon turn red. This indicator suggests that consumers, who drive the US economy, may reduce their spending, leading to a potential economic downturn.

The primary catalyst for this potential recession is the 25% levy on auto imports announced by Trump. This move, along with the reciprocal tariffs to be revealed on April 2, could have significant economic implications. While a recession would negatively impact the broader economy, it could be beneficial for risky assets like BTC, ETH, and SHIB. Historically, the crypto market has reacted positively to Federal Reserve actions aimed at mitigating recessions, such as rate cuts and quantitative easing.

Technical analysis of SHIB indicates that its price has declined from a high of $0.000035 in November to a low of $0.00001125 this month. This drop coincides with an ascending trendline that has been in place since March 2021. The current price pattern, known as a rising broadening wedge or megaphone, is generally bullish. If this pattern holds, SHIB could rebound to $0.000025 in the coming weeks, representing a 65% increase from its current level. However, a drop below the ascending trendline could invalidate this bullish prediction, potentially leading to further declines to $0.000070.

Ask Aime: What will be the impact of the new auto tariffs on the crypto market?

Bitcoin, the leading cryptocurrency, has been a significant driver of the crypto market's recent movements. However, its price has formed a rising wedge pattern and has struggled to move above $90,000. This pattern, along with a double-top formation, suggests a potential reversal in the near future. If this bearish outlook materializes, Bitcoin could drop to its year-to-date low of $76,890. Conversely, a rise above $95,000 would invalidate the bearish prediction.

Ethereum's price faces two technical challenges. It has formed a triple-top pattern at $4,000 and has since crashed below its neckline at $2,120. Additionally, it has formed a bearish flag pattern, which consists of a tall vertical line and a rectangle pattern. This pattern suggests that Ethereum's price could decline further, potentially reaching the support level at $1,746, which is the year-to-date low. A move above the psychological point at $2,500 would cancel the bearish prediction for Ethereum.

In summary, the crypto market is navigating through uncertain times as economic indicators point towards a potential recession. While this could be detrimental to the broader economy, it may present opportunities for risky assets like BTC, ETH, and SHIB. Technical analysis suggests that these cryptocurrencies could experience significant price movements in the coming weeks, with both bullish and bearish scenarios possible depending on market conditions and Federal Reserve actions.