The US Tariff Dust Settles: How to Trade Bitcoin Now? ｜Matrixport Research
U.S. President Trump has introduced a fresh wave of tariffs on America’s trading partners. While equities have pulled back, the market reaction — especially in implied volatility — remains relatively subdued, suggesting this isn’t being viewed as a full-blown risk-off event. There is still room for negotiation, which may represent an opening move in a months-long trade negotiation process, potentially extending into June, as Treasury Secretary Scott Bessent has suggested.
As highlighted recently, Bitcoin remains stuck below the key resistance zone around $90,000. The Fed is neutral. While arbitrage-driven selling by hedge funds has likely subsided — evidenced by compressed basis and funding rates and a significant unwind in CME Bitcoin futures during the monthly roll — buying interest remains weak.
The VIX, Wall Street’s fear gauge, rose modestly from 20% to 23.5%, still far below the 36% peak seen in August 2024 when recession fears surged. That period led to a rare 50-basis-point emergency rate cut by the Fed in September, which ignited a Q4 rally — fueled further by Elon Musk’s public support for Trump and his eventual election win. But it was the Fed’s decisive policy shift that laid the groundwork.
The upcoming U.S. earnings season holds heightened significance — particularly following a wave of restocking activity ahead of the tariff announcements. However, recent data, such as the ISM Manufacturing PMI falling back into contraction territory, suggests that this restocking cycle has ended.
The forward-looking New Orders index also signals further weakness ahead. Significantly, the Fed’s last rate cut in September 2024 wasn’t driven by weak growth but concerns about a potential slowdown in the labor market — something that hasn’t materialized.
In the crypto market, the 1-week Bitcoin skew briefly spiked to 20%, reflecting heightened demand for downside protection near the $80,000 level. Option skew refers to the difference in implied volatility between out-of-the-money puts and calls, often reflecting market sentiment regarding the relative risk of downside versus upside.
A positive skew means puts are more expensive than calls, indicating more demand for protection against price drops. However, the skew has since eased to 9%, with tariff fears receding from the headlines. As a result, many of those puts are likely to expire worthless — potentially triggering a modest wave of buy-side pressure as traders unwind their hedges.
Trump is likely to pivot toward more market-friendly messaging — such as tax cuts or deregulation — to stabilize sentiment, as his reshoring plans depend on strong domestic and international investment in the U.S.
Disclaimer: The above content is for informational purposes and reference only. The content does not constitute investment advice. Digital asset transactions can be precarious and volatile. Investment decisions should be made after carefully considering individual circumstances and consulting financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.
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