Bitcoin Drop Deepens as U.S.-China Trade War Escalates
.April 16, 2025
By Francisco Rodrigues (All times ET unless indicated otherwise)
Cryptocurrency prices are down across the board over the last 24 hours amid a wider risk asset sell-off triggered by deepening U.S.-China trade tensions.
The White House said China now “faces up to a 245% tariff on imports” and imposed new restrictions on chip exports to the country. Bitcoin (BTC) fell more than 2.2% while the broader market, measured by the CoinDesk 20 (CD20) index, declined 3.75%.
Nasdaq 100 futures are also down, losing more than 1% while S&P 500 futures dropped 0.65%. While bitcoin has remained notably stable as the trade war escalated, some metrics suggest the bull run may have ended.
The largest cryptocurrency slipped below its 200-day simple moving average on March 9, suggesting “the token’s recent steep decline qualifies this as a bear market cycle starting in late March,” Coinbase Institutional said in a note
A risk-adjusted performance measured in standard deviations known as the Z-Score shows the bull cycle ended in late February, with subsequent activity seen as neutral, according to Coinbase Institutional’s global head of research, David Duong.
Still, the resilience cryptocurrency prices have shown is “undoubtedly good for the market,” as it lets traders “look more seriously at using premium to hedge — supporting the case for allocating into spot,” said Jake O., an OTC trader at crypto market maker Wintermute.
“In response, several prime brokers have shifted their short-term models from underweight to neutral on risk assets, noting that the next move will likely be driven by ‘real’ data,” Jake O. Said in an emailed statement.
That “real data” is coming in soon enough, with the U.S. Census Bureau set to release March retail sales data, and Fed Chair Jerome Powell delivering a speech on economic outlook. Tomorrow, the U.S. Department of Labor releases unemployment insurance data and the Census Bureau releases residential construction data, while the ECB is expected to cut interest rates.
The shakiness in risk assets has benefited gold. The precious metal is up around 26.5% year-to-date to above $3,300 per troy ounce, contrasting with the U.S. Dollar Index’s 9% drop. Stay alert!
April 16, 9:30 a.m.: Spot solana (SOL) ETFs with support for staking rewards, from asset managers Purpose, Evolve, CI and 3iQ, are expected to begin trading on the Toronto Stock Exchange.
April 17: EigenLayer (EIGEN) activates slashing on Ethereum mainnet, enforcing penalties for operator misconduct.
April 18: Pepecoin (PEP), a layer-1, proof-of-work blockchain, undergoes its second halving, reducing block rewards to 15,625 PEP per block.
GMX DAO is discussing the establishment of a GMX Reserve on Solana, which would involve bridging $500,000 in GMX to the Solana network and transferring the funds to the GMX-Solana Treasury.
Treasure DAO is discussing handing authority to the core contributor team to wind down and shut down Treasure Chain infrastructure on ZKsync and manage the primary MAGIC-ETH protocol-owned Liquidity pool given the “crucial financial situation” of the protocol.
April 16, 7 a.m.: Aergo to host an ask me anything (AMA) session on the future of decentralized artificial intelligence and the project.
A record $12 billion worth of stablecoins were transferred on the Solana blockchain in March, a 445% increase from the $2.2 billion reported in March 2024
USDC is the dominant stablecoin at 75% of the ecosystem’s total stablecoin market cap, according to DefiLlama data.
Stablecoin supply doubled from $6 billion between early January and April 15, coinciding with a drop in speculative activity (such as memecoin trading) on the blockchain.
Open interest in offshore BTC perpetuals and futures fell as prices retreated from $86K to nearly $83K. The drop shows lack of participation in the price decline.
ETH, XRP and SOL perpetual funding rates remained negative in a sign of bias for short, or bearish, positions.
The annualized BTC and ETH CME futures basis remains rangebound between 5% and 8%, showcasing caution among institutional players.
Options tied to BlackRock’s spot bitcoin ETF showed bias for bullish directional exposure to the upside in longer maturity options, but at the same time, priced short-term downside risks more aggressively.
On Deribit, positioning remains defensive, exhibiting a bias for short and near-dated options.
BTC is down 0.26% from 4 p.m. ET Tuesday at $83,823.34 (24hrs: -2.7%)
ETH is down 1.23% at $1,575.79 (24hrs: -3.31%)
CoinDesk 20 is down 1.67% at 2,410.72 (24hrs: -3.75%)
Ether CESR Composite Staking Rate is down 16 bps at 3.02%
BTC funding rate is at 0.0079% (8.6494% annualized) on Binance
DXY is down 0.59% at 99.63
Gold is up 3.31% at $3,325.20/oz
Silver is up 2.58% at $33.06/oz
Nikkei 225 closed -1.01% at 33,920.40
Hang Seng closed -1.91% at 21,056.98
FTSE is down 0.44% at 8,212.76
Euro Stoxx 50 is down 0.79% at 4,931.25
DJIA closed on Tuesday -0.38% at 40,368.96
S&P 500 closed -0.17% at 5,396.63
Nasdaq closed unchanged at 16,823.17
S&P/TSX Composite Index closed +0.84% at 24,067.90
S&P 40 Latin America closed unchanged at 2,337.88
U.S. 10-year Treasury rate is unchanged at 4.34%
E-mini S&P 500 futures are down 0.6% at 5,395.75
E-mini Nasdaq-100 futures are down 1.18% at 18,736.50
E-mini Dow Jones Industrial Average Index futures are up 2% at 40,531.00
Funding rates in perpetual futures tied to the privacy-focused token monero (XMR) remain deeply negative, indicating a dominance of bearish short positions.
The notable bias for shorts means a potential upswing in prices, as suggested by technical charts, could trigger a short squeeze, leading to bullish volatility boom.
Hongkong Post Suspends Goods Mail Services to US (Reuters): Hongkong Post will halt sea mail of goods to the U.S. immediately and suspend air mail from April 27, calling the end of duty-free treatment for low-value parcels a “bullying act.”
Even Without Add-Ons, Trump’s 10% Tariffs Will Have a Sting (The New York Times): Trump’s 10% baseline tariff may seem modest, but Oxford Economics warns the full package could shrink global trade by 5% — a drop comparable to 2020’s pandemic shock.
