Tariff Trade War Fears Trigger a 6% Risk-Off Weekend Plunge in Cash Bitcoin
by Mike Paulenoff
February 2, 2025 • 1:27 PM EST
Never a dull moment since January 20, 2025! This weekend, POTUS imposed 25% tariffs on Mexico and Canada, and 10% on China, which go into effect on Tuesday.
From an initial market perspective, tariff trade war fears have triggered a risk-off reaction from Bitcoin-- the only highly liquid weekend market that can give us insight into what to expect for Sunday evening and Monday morning trading. Cash Bitcoin has nosedived from around 103,000 to as low as 96,900 (-6%) since late Friday in advance of and after confirmation from POTUS that he intends to make foreign countries-- allies and adversaries alike-- pay a penalty for access to our consumer markets if the Trump Administration perceives they are treating the U.S. "unfairly."
Even if leaders of Mexico, Canada, and China agree to rectify the situation, most likely, the Trump Administration will continue to impose the tariffs until the data prove that U.S. borders are closed, much safer, and cross-border fentanyl has slowed to a trickle, which could take several months. In other words, the positive impact of the tariffs on immigration and drug trafficking will take a while to emerge, but the negative impact on the cost of many US goods could elevate much more rapidly.
Without getting too much into the weeds on a Sunday afternoon, unless the leaders of Mexico, Canada, and China offer POTUS some fantastic concessions (whatever those might be) to reverse Trump's tariff authorizations, traders and investors will find themselves in the position of parsing out winners, losers, and unintended consequences in the weeks directly ahead.
Welcome back to "Trump World!"
Technically, it is significant that today Bitcoin sliced beneath last Monday's (1/27/25) "DeepSeek" AI pullback low at 97,700. This leaves BTC vulnerable to a downside continuation toward a full-fledged test of much more consequential support from 89,000 to 92,000. Let's see what happens overnight into Monday morning's market openings.
Join me and our MPTrader members for opportunistic intraday discussions about individual stocks during the height of Earnings Season, market indices, sector ETFs, bond proxy ETFs, commodities, precious metals, and Bitcoin.
On February 26, 2025, just 30 minutes before NVDA (Nvidia Corp) was scheduled to release its highly anticipated and potentially consequential Quarterly Earnings Report, I reiterated my most recent analysis uploaded before the opening bell. This is what I posted to the MPTrader Discussion Room:Technically, my Big Picture setup work on NVDA argues that the 2/03/25 low represented the END of a major correction that originated at NVDA's "orthodox" price high of 152.89 on 11/21/24-- the session following the company's November 20, 2024 Earnings report.
Before the market opening on February 4, 2025, hours after Palantir Technologies (PLTR) reported stellar Earnings, this is what I discussed with MPTrader members:In reaction to Earnings, PLTR has sustained strength above my "outlier" target zone of 96 to 100, which requires new upside pattern parameters. My optimal price path from atop the post-Earnings, 25% upmove points to an immediate objective of 105-08, followed by a contained pullback into the 95 area, ahead of a thrust toward 115-118 thereafter... Last is 103.50...
On January 6, 2025, this is what I discussed with MPTrader members about the Chinese equity names--Alibaba (BABA) in particular:BABA-- For anyone who wants an outlier contrarian play for the first two-quarters of the Trump Agenda, let's consider BABA. Purely from a technical perspective, I can make a compelling technical argument that the 12/20/24 low at 81.5 ended the larger correction off of the Oct 2024 upleg (from 71.80) high at 121.06. To confirm the low, any weakness must hold support at 81.50-83.
On December 27, 2024, with META trading at 595.26, this is what I posted to the MPTrader Discussion Room in response to a member's question:My pattern work from the October 2023 low at 279.40 to the December 2024 ATH at 638.40 (+128%) tells me that META is at a technical crossroad now... META's most recent upleg from the 11/19/24 low at 547.71 to the 12/11/24 ATH at 638.40 has the "right look" of a completed advance.
At the close of trading on December 18, 2024, this was my final thought posted to our discussion room at MPTrader.com:ES (March 2024 E-mini SP 500)-- Stating the obvious: Today's reaction to the FOMC Rate CUT (!!) inflicted serious near-term technical damage to the dominant, post-August uptrend... Last 5960.75...Thirty minutes after the close on December 18, 2024, I followed up with this commentary for MPTraders:My preliminary "conclusion" about today's outsized 3.