Crypto News Today: BTC and ETH Gain as Trade War Rages – Is The Sell-Off Over?

Earlier today, Chinese officials announced that they will impose a 34% tariff on imported goods from the United States.

This is the first time that the Asian country has imposed retaliatory levies on all U.S. products. Meanwhile, combined with previous tariff increases announced by the White House, all Chinese goods arriving in the U.S. will pay a 54% levy at best.

A bit later, a strong non-farm payrolls report managed to appease the negative sentiment as 228,000 new positions were created in March within the United States, amply surpassing Dow Jones’ consensus estimate of 140,000 for the period.

None of these developments play in favor of crypto valuations. First, a strong economy – reflected by robust job numbers – gives the Federal Reserve no incentive to lower interest rates.

Moreover, China’s retaliation against Trump could result in higher inflation for the United States. Chairman Jerome Powell is expected to give a speech later today where he may announce the Fed’s view of these events and how they will proceed.

Crypto liquidations reflect the market’s erratic pace as traders digest the implications of the news. An equal amount of $116 million worth of long and short positions have been wiped out in the past 24 hours.

BTC Gains Could Evaporate as Momentum Turned Negative

Even though trading volumes for BTC are down by 25% compared to the previous day, they are still pretty high compared to the 14-day simple moving average.

BTC was on an uptrend until China’s tariff announcement hit. Now, the price seems to have made a lower high while momentum indicators have turned bearish ahead of Powell’s speech.

A Fibonacci retracement of the entire uptrend shows that the 61.8% marker has been broken in this past hour after the American session started. If bulls fail to recapture this key level, the first stop would be the $81,650 level and then $81,150 meaning a 3.4% downside potential that would end up pushing today’s session to negative territory for Bitcoin.

The Relative Strength Index (RSI) is favoring a bearish short-term outlook as it has dropped below the signal line already while the MACD’s histogram has moved to negative territory for the first time since yesterday afternoon.

ETH Could Drop to $1,500 if It Loses This Support

Same as BTC, Ethereum made a lower high in the past few hours and a confirmation candle has emerged that could confirm a bearish outlook for the rest of the session – unless Powell says something positive.

The next stop for ETH would be the $1,750 level meaning a slight downside risk. However, the token would be in big trouble if it breaks below this area as the next support to watch sits at $1,750 in the 4-hour chart.

The absence of strong support areas along the way for ETH increases the odds of a big first downswing. The total downside risk at this point would be around 14.3% if a bearish breakout occurs.

Momentum indicators favor a bearish outlook as the RSI has retested and rejected a move above the signal line while the MACD has swung to negative territory as well.