Bitcoin (BTC) Holds Steady Despite Impending Tariff Escalation, Contrasting Market Stance from a Week Ago

Despite the increasing rhetoric surrounding President Donald Trump's tariffs, bitcoin (BTC) is holding steady alongside positive cues from foreign exchange risk barometers like AUD/JPY.

Fresh cues emerged on Tuesday morning as President Donald Trump prepared to impose tariffs on steel and aluminum imports, adding to the existing metal duties. Despite the escalating trade tensions, bitcoin (BTC) price action remained largely stable, exhibiting resilience.

However, a social media post highlighted a record buildup of open short positions in the CME-listed cash-settled ether futures, sparking discussions on the market structure.

Later today, Trump is due to impose 25% tariffs on steel and aluminum imports from all countries except Argentina, Brazil and South Korea. The move comes after Trump announced the tariffs on March 8, sparking a wave of uncertainty in the markets.

However, the markets largely shrugged off the news, with bitcoin price action remaining largely flat over the past 24 hours. BTC was trading in the green at around $23,800, showing a 0.5% gain.

This market stance ahead of an impending tariff escalation contrasts starkly with the risk aversion observed a week ago, when Trump fired the first tariff shot. Perhaps market participants now think Trump is using aggressive tactics to negotiate trade deals rather than committing to sustained tariffs. This notion has gained traction following last Monday's decision to suspend tariffs on Mexico and Canada for 30 days, hinting at a more strategic approach to trade negotiations.

According to QCP Capital, the current market stability could embolden Trump to take a tougher stance.

"A feedback loop is emerging — President Trump, highly sensitive to market reactions, is facing a market increasingly calling his bluff. This could embolden him further, adding another layer of volatility," QCP said in a Telegram broadcast.

It will be interesting to see how this develops.

There's a social media post doing the rounds that shows a staggering 200,000 open short positions in the CME-listed cash-settled ether futures, highlighting a buildup of bearish bets on the derivatives market.

However, these shorts are not necessarily outright bearish bets and could instead be part of carry trades, where investors take on short positions in CME futures to amplify their exposure while maintaining long positions in exchange-traded funds (ETFs). Notably,觀察人士 pointed out that ether ETF inflows surged last week, reaching a record $150 million in net creation.

Moreover, some of the shorts may be investors hedging their long altcoin bets against the backdrop of the vast number of coins and the upcoming large unlocks.

Over the weekend, Base member and NFT enthusiast Kabir.Base.eth refuted claims that the sequencer Coinbase had been quietly selling ETH earned as fees, adding a layer of transparency to its operations.

In another notable development, Archange Touadéra, president of the Central African Republic, reportedly issued a new memecoin that saw a trader turn $5,000 into an astonishing $12 million in less than three hours, achieving a remarkable return of 2,450x, according to LookOnChain data.

Meanwhile, litecoin (LTC) continues to shine as the top-performing cryptocurrency of the past 24 hours, up 9%.

On the macroeconomic front, the University of Michigan's one-year consumer inflation expectations rose to 4.2% in February from 3.9% in January, marking the highest level since July 2022. This surge raises concerns about the likelihood of a prolonged pause in the Federal Reserve's rate cuts.

Additionally, the U.S. Consumer Price Index (CPI) is due for release on Wednesday. Stay tuned.