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Bitcoin prices steadied on Friday after a sharp reversal of recent gains, as traders focused on the impending rollout of U.S. President Donald Trump’s trade tariffs and the ongoing uncertainty surrounding interest rate cuts. Despite the earlier optimism, the market remains cautious ahead of the U.S. Independence Day holiday and a slew of key events.
By 01:15 ET (05:15 GMT), Bitcoin had fallen by 0.2% to $109,112.7 after initially rising to $110,500 in overnight trading. The cryptocurrency had broken out of the $103,000 to $108,000 range seen in the past month, fueled by optimism surrounding U.S.-China trade negotiations. Bitcoin had risen 1.6% for the week, marking its second consecutive week of gains.
However, this optimism began to fade amid concerns about high U.S. tariffs and the absence of near-term interest rate cuts. Markets also remained on edge following the passage of President Trump’s tax and spending bill, which is projected to significantly increase government debt in the coming years.
Bitcoin’s Price Action and Tariff Concerns
The recent gains in Bitcoin were quickly tempered as President Trump announced that the U.S. would begin sending letters to major economies outlining the new tariff rates, set to take effect on August 1. The tariffs are expected to range between 10% and 20%, and 60% to 70%, a move that is anticipated to disrupt global trade.
Trump’s comments have raised concerns about the potential economic impact of these tariffs, which have already created uncertainty in the global market. The uncertainty surrounding the tariffs was also highlighted by Federal Reserve Chairman Jerome Powell, who warned about the inflationary impacts of the duties and reiterated the Fed’s decision to keep interest rates steady.
Following stronger-than-expected nonfarm payrolls data released on Thursday, markets sharply reduced expectations for an interest rate cut in July, with further reductions in September also less likely. Higher interest rates generally limit liquidity, putting pressure on risk assets like cryptocurrencies.
Crypto Market Reaction: Altcoins Fall Amid ‘Crypto Week’ Announcement
Broader cryptocurrency prices followed Bitcoin’s retreat, with most altcoins experiencing losses on Friday. The announcement of the U.S. “Crypto Week,” scheduled for July 14, which will focus on advancing crypto regulatory measures, had little immediate impact on prices.
During this week, the House of Representatives will review at least three regulatory acts related to cryptocurrencies, including the GENIUS Act, which outlines a regulatory framework for stablecoins, the CLARITY Act, and the Anti-CBDC Surveillance State Act. However, despite the significance of these legislative measures, the crypto market showed little enthusiasm, with key altcoins declining.
Ether, the second-largest cryptocurrency, fell 0.5% to $2,576.27, while XRP dropped 1.2% to $2.2430. XRP’s decline came despite reports that its issuer, Ripple, was seeking a U.S. banking license. Solana and Cardano also fell between 1.7% and 2%, adding to the bearish sentiment.
Among meme coins, Dogecoin shed 2.5%, while $TRUMP fell 1.6%. The market remained subdued despite the positive regulatory developments being pushed forward by lawmakers, signaling ongoing investor hesitation in the face of broader market uncertainty.
Market Sentiment Remains Cautious Amid Uncertainty
While Bitcoin experienced an initial surge driven by optimism surrounding trade talks, it struggled to maintain upward momentum as concerns over U.S. tariffs and fiscal policy weighed on investor sentiment. The announcement of “Crypto Week” and the legislative actions related to cryptocurrencies provided little immediate support to prices.
As the U.S. tariff deadline approaches, coupled with the Fed’s cautious stance on interest rate cuts, the broader cryptocurrency market faces a challenging environment. With the Independence Day holiday approaching and key economic data on the horizon, traders are expected to remain cautious and closely monitor further developments in both the global trade landscape and U.S. fiscal policy.
