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While the recent tariff pause introduced by former U.S. President Donald Trump has provided some relief to financial markets, cryptocurrency traders remain cautious about committing to risk assets. The crypto market is currently navigating a balance between cautious optimism and persistent uncertainty, with Bitcoin (BTC) trading sideways and Bitcoin ETF flows showing subdued activity.

The Impact of Trump’s Tariff Pause

According to market analysts, Trump’s 90-day pause on tariffs is not a long-term solution but rather a temporary reprieve. This measure has failed to address broader trade uncertainties, keeping investors wary of riskier assets such as Bitcoin. Analysts note that the pause does little to reduce the looming threat of tariffs, making traders hesitant to adopt aggressive risk-on positions.

“Trump’s 90-day tariff pause is not a resolution, only a delay. Investors understand that tariff threats remain on the table, and as such, positioning is unlikely to shift aggressively toward risk-on just yet.”

Bitcoin ETF Outflows Continue

Bitcoin ETFs have seen consistent outflows, highlighting the cautious sentiment among investors. As of April 10, ETFs recorded their sixth consecutive day of negative flows, with daily outflows totaling $149 million. April 8 marked the largest single-day outflow, with $326 million exiting Bitcoin ETFs.

These persistent outflows underscore the lack of confidence in the current market environment, where investors are prioritizing safer assets over cryptocurrencies.

Bitcoin vs. Equities: Potential Underperformance

Analysts suggest that in the current environment, crypto assets, including Bitcoin, are likely to underperform equities until a significant catalyst emerges. Potential drivers for a recovery could include a dovish pivot by the U.S. Federal Reserve or a renewed wave of liquidity in cryptocurrency markets.

“Bitcoin may also benefit from a slight reduction in macro pressure, but the market will likely wait for more concrete signals—such as a shift in Fed tone or improving liquidity conditions—before aggressively rotating back into crypto. We believe that crypto could underperform equities in relative terms until this happens.”

Macroeconomic Factors at Play

There is speculation that Trump’s pressure on Federal Reserve Chair Jerome Powell to reduce interest rates could provide some relief to markets. However, with inflation concerns rising, the Federal Reserve is unlikely to change course unless significant leadership changes occur. A recent Supreme Court decision has temporarily enabled Trump to oust officials from independent agencies, raising discussions about whether Powell could be affected.

For cryptocurrency investors, these macroeconomic factors remain critical to watch. Any shifts in Federal Reserve policies or broader liquidity changes could influence Bitcoin’s performance relative to equities.

Key Takeaways for Crypto Investors

Given the current landscape, cryptocurrency investors should consider the following:

  • Monitor macroeconomic developments, particularly Federal Reserve policy changes.
  • Stay informed about ETF flow trends, as they reflect broader market sentiment.
  • Be cautious with risk-on positions until clearer market signals emerge.

While Bitcoin’s sideways trading and ETF outflows highlight investor caution, the crypto market could see improved performance if key catalysts materialize. Staying updated on macroeconomic shifts and liquidity trends will be essential for navigating the evolving financial landscape.

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