Leading the crypto news this week, the cryptocurrency market enters April on shaky ground after BTC, ETH, and the S&P 500 logged their worst quarterly performance in three years.
According to QCP Broadcast’s latest report, over $160 billion in crypto market capitalization has been wiped out since Friday. This means that it is a sobering start to Q2 for crypto prices.
Friday’s sharp market pullback was mainly because of a large quarter-end expiry. This has pushed dealers to sell aggressively. This also caused perpetual futures funding to flip from flat to negative.
Trump’s tariff announcement and crypto news
All eyes are on Donald Trump’s “Liberation Day” scheduled for April 2nd. This is when the former president has promised to unveil a sweeping set of reciprocal tariffs. This announcement comes at a particularly sensitive time for markets, with consumer confidence at 12-year lows and equity markets already suffering a 4-5% weekly drawdown.
QCP Broadcast highlights that there is “a real risk that a broad and aggressive regime could deepen recession fears and send risk assets spiraling.”
The Kobeissi Letter notes a concerning pattern:
“The start of President Trump’s trade war came with a top in the 10-year note yield. Throughout the course of the last 2 months, rates have fallen as markets priced in a recession.”
This observation ties the previous tariff announcements directly to the market pricing of recession risk.
However, QCP Broadcast also suggests that a softer-than-expected tariff rollout could offer crypto markets a brief reprieve from recent selling pressure. This potential for policy flexibility may provide positive crypto news for the market as a whole.
Key economic indicators and Fed watch
Apart from Trump’s tariff declaration, the traders are following closely some key high-impact economic releases that may dictate direction in the markets this week. As reported by QCP Broadcast, the week is full of possible market-moving events:
The week starts on Tuesday with ISM Manufacturing PMI and JOLTS Job Openings releases, which will give a gauge of factory production and labor market health. Thursday comes with ISM Services PMI, a glimpse of the well-being of the prevailing services sector.
The week comes to a climax on Friday with the highly significant Nonfarm Payrolls report, Unemployment Rate numbers, and Federal Reserve Chair Jerome Powell’s speech. This mix of labor market information and central bank testimonies will likely have a big effect on rate cut expectations and mood in the markets.
The Kobeissi Letter points to a concerning divergence in key indicators: “Over the last 11 weeks, the 10-year note yield has fallen 65 basis points in a massive reversal. Meanwhile, 1 and 3-month annualized inflation metrics have risen to 4%+. Rates are FALLING while inflation is RISING.”
Crypto prices – where are they headed?
Volatility is showing mixed performance across asset classes as Q2 begins. The VIX index, which measures expected volatility in the S&P 500, remains elevated at 22. In contrast, QCP Broadcast notes that “crypto vols have defied the selloff, drifting lower despite a similar drawdown and Friday’s mega washout.”
This divergence in volatility expectations between traditional and crypto prices suggests different sentiments. QCP reports activity “was skewed bullish into Asia open” on their trading desk, with buyers “taking topside exposure ($85k-$90k strikes) and selling downside risk ($75k strikes), a potential bet on a firmer start to Q2.”
While April has historically been a seasonally strong month for crypto prices, QCP maintains a cautious outlook.
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