Financial Markets Brace for Impact as U.S. Tariff Announcement Looms

According to CoinDesk, Wednesday could be a significant day for financial markets, including cryptocurrencies, as U.S. President Donald Trump is anticipated to announce extensive reciprocal tariffs aimed at addressing what he perceives as unfair trading practices by the United States' partners. This announcement is expected to have wide-ranging implications, potentially affecting various sectors, including the cryptocurrency market. In the lead-up to this announcement, there are indications of a downtrend exhaustion in the ether (ETH) market. Historically, ETH has lagged behind Bitcoin during the two-year cryptocurrency bull run. However, if the forthcoming tariffs are less severe than anticipated, ETH might take the lead. Recently, ether prices fell alongside bitcoin, but sellers were unable to push prices below the 16-month low of $1,755 reached on March 11. This inability to breach the low is seen as a sign of seller fatigue or downtrend exhaustion. Since then, ether prices have rebounded to $1,880, hinting at a potential double bottom formation with resistance at $2,104. A breakthrough at this level could confirm a bullish breakout, paving the way for a rise to $2,400, identified as the next resistance level using the measured move method. Additionally, a bullish divergence has been observed. While prices revisited the March 11 low last week, the histogram, which measures the spread between the price and its 50-day simple moving average (SMA), did not follow suit and instead formed a higher low. This divergence suggests that although prices declined, the momentum behind the downward movement weakened. Furthermore, the three-line break chart, which had been in a prolonged downtrend, has now flipped bullish, indicating a significant shift in market sentiment. This is evidenced by the appearance of a green bar on the daily time frame, signaling a potential reversal in price momentum. The previous bullish signal from early March was short-lived and turned out to be a bear trap. However, the latest bullish flip appears more reliable as it is supported by signs of downtrend exhaustion on candlestick charts. Despite these positive indicators, macroeconomic factors, such as the anticipated tariffs, could significantly impact market dynamics. Broad-based risk aversion triggered by the tariff announcement could negate all the bullish signals currently observed, potentially leading to further losses in ether. As the market awaits President Trump's announcement, investors remain cautious, aware of the potential for significant market shifts.