The crypto market is entering April under mounting pressure. A potent mix of technical breakdowns, macroeconomic uncertainty, and geopolitical tension threatens to unwind much of the gains secured after Donald Trump’s election win in November.
The big question: Will the bears entirely wipe out the “Trump pump” in April? Let’s examine.
The total crypto market cap chart is flashing a bear flag pattern, characterized by a rising parallel channel forming after a sharp drop. Bear flags are considered bearish continuation patterns, given their history of declining strongly after breaking below the lower trendline.
As a technical rule, traders measure their bear flag’s downside target by subtracting the previous downtrend’s height (flagpole) from the potential breakdown point.
That said, a breakdown scenario from the crypto market’s bear flag structure could expose it to a deeper correction toward $2.31 trillion, almost the same as before Trump won the US election in November 2024.
Failure to hold above this level would validate the bear flag and potentially extend the decline toward the 200-day EMA (the blue wave) near $2.28 trillion. However, that appears to be an unlikely scenario in April due to additional headwinds coming from the US.
Risk appetite showed signs of dampening on April 2, after President Trump announced sweeping tariffs on the US’s major trade partners—a move reminiscent of the infamous Smoot-Hawley Tariff Act of 1930.
As detailed earlier in this report, protectionist policies risk triggering a global slowdown. The 1930s precedent led to a 66% collapse in global trade and helped deepen the Great Depression.
Risk markets didn’t take long to react. S&P 500 futures plunged 3.5%, Nasdaq 100 contracts dropped over 4.5%, while gold and the Japanese yen surged. Bitcoin and broader crypto initially bounced on April 3, but they risk becoming shallow recoveries amid deteriorating fundamentals.
Adding to the concern, Goldman Sachs recently raised its estimate for a U.S. recession in the next 12 months to 35%, citing tariffs’ likely impact on inflation and GDP growth. Likewise, Harvard economist Jeffrey Frankel has warned that escalating trade tensions represent a growing threat to the global economic outlook.
More downside risks for the crypto market come from the forward rates markets.
The target rate probability of a 25 basis point rate cut in June dropped from 62.30% to 57.10% shortly after Trump announced tariffs against the US’s global trading partners, according to CME data.
The shift reflects growing expectations that tariffs could reignite inflation, particularly via rising import costs, forcing the Fed to delay any policy loosening. With inflation risk back on the table, the Fed may keep rates higher for longer.
That’s a problem for the crypto market. Bitcoin and altcoins have historically thrived on expectations of loose monetary policy.
However, with no clear sign of rate cuts, risk appetite may remain subdued through April and June, limiting upside potential and increasing vulnerability to macro shocks.
US economist Mohamed El-Erian further expects the Federal Reserve to deliver just one interest-rate cut this year; that is against the popular narrative of two rate cuts.
Yashu Gola is a crypto journalist and analyst with expertise in digital assets, blockchain, and macroeconomics. He provides in-depth market analysis, technical chart patterns, and insights on global economic impacts. His work bridges traditional finance and crypto, offering actionable advice and educational content. Passionate about blockchain's role in finance, he studies behavioral finance to predict memecoin trends.