Bitcoin (BTC) still buffeted by tariff headwinds

US president Donald Trump is still waging his tariff war with the rest of the world. A recent promise to levy a 25% tax on all steel and aluminium coming into the US may continue to have a dampening effect on the US stock market. Bitcoin (BTC) is still struggling to regain $100,000.

Tariffs to see widening use

Donald Trumps trade war is spreading. Initially concentrated on Canada and Mexico, two countries bordering the US, and also on China, the President is now considering tariffs on Europe. He said that new tariffs could be imposed on Europe as early as Tuesday or Wednesday.

While the tariffs could just be a way for Trump to be able to negotiate deals with other countries from a position of strength, they will have negative effects for US businesses and citizens. Car prices in the US could rise as much as an extra $3,000 according to TD Economics, quoted in a BBC article on the subject.

If one looks back on tariffs imposed through history, it is generally the case that the tariffs neither benefit the countries they are levied against, nor the countries that are imposing them. Therefore, it might be expected that these tariff wars could just be short to medium term headwinds for the economies involved.

However, if no agreements are reached, and the tariffs do continue into the longer term, this could have quite a depressing effect on the major world economies, leading to a real drag on the growth of these economies.

Bitcoin in a local downtrend

Its in the midst of this particular macro-economic environment that Bitcoin is attempting to continue its current bull market. The $BTC price has been in a downtrend since the $109,000 all-time high was achieved on 20 January. A spike down to a local bottom of $91,000 has since occurred, and now it remains to be seen if this downtrend can be broken.

$BTC higher high is needed

Source: TradingView

$BTC is currently battling the resistance at $97,000, with further resistances all the way through to $99,000. A descending wedge has formed on top of the bigger previous wedge, and breaking out here will be the number one priority of the bulls.

The downtrend since the all-time high of $109,000 is still in force until the bulls can make a higher high, which would be above $100,200. Failure to achieve this would potentially just lead to another dip down to the descending trendline of the bottom of the wedge, or even the local low at $91,300.

Bitcoin range-bound for the rest of February?

Source: TradingView

The daily chart for $BTC shows the $14,000 range that measures from $92,000 up to $106,000. The next two lows are on the chart at $100,200 and $102,500. Both of these would ideally need to be taken out for the bulls to then have another crack at the top of the range.

This achievement might have to wait a while, as all the short-term Stochastic RSIs are currently moving towards the overbought position. That said, the weekly Stochastic RSI is coming down fast and should bottom over the next two to three weeks. This would take us into the beginning of March, and potential renewed upside price momentum.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Text source: Crypto Daily™

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