Bitcoin Faces Pressure Amidst US Manufacturing Decline and Tariff Uncertainties

Bitcoin’s price faces potential decline due to recent negative US manufacturing data. The Philadelphia Federal Reserve reported sharp decreases in business activity, raising concerns among analysts. Despite looming tariffs and economic challenges, Bitcoin has shown resilience compared to stocks, stabilising around $84,000 despite an initial drop after tariff announcements.

Recent reports indicate that Bitcoin’s price may be negatively impacted due to disappointing US manufacturing data. The Philadelphia Federal Reserve Manufacturing Index, published on April 17, highlighted significant declines in overall business activity, marking the sharpest downturns since 2020. This data has raised concerns among cryptocurrency analysts who believe Bitcoin is under short-term pressure but may rebound if it maintains a price above $83,000 per coin.

As of April 18, Bitcoin’s trading price was around $84,000. The bleak manufacturing report coincides with potential tariffs on US imports proposed by President Donald Trump, which could heighten production costs. The Federal Reserve report noted declines in general activity, new orders, and shipments, suggesting expectations for subdued growth in the upcoming months.

Analysts warn that the interplay of rising prices and slowing production may negatively impact financial markets, including cryptocurrencies. Such economic conditions would limit central banks’ abilities to offer support during downturns. Macroeconomic analyst Felix Jauvin expressed concerns, stating the scenario presents significant challenges for policymakers, especially with uncertain tariff outcomes.

Despite these challenges, Bitcoin has demonstrated greater resilience against macroeconomic shocks than other assets, according to a Binance report. Since the announcement of Trump’s tariffs on April 2, Bitcoin’s price has stabilised after an initial drop, trading flat while the S&P 500 index declined by approximately 7%. Binance noted Bitcoin’s capacity to maintain steadiness on days when traditional risk assets dropped, signalling some robust characteristics amidst turbulence.

While Trump initially aimed for significant levies on imports, he later eased some of those plans; nonetheless, intentions to impose high taxes on Chinese goods remain a concern. Cryptocurrency executives are apprehensive that such trade disputes could adversely affect blockchain networks, further complicating the landscape for digital assets.