Trump Tariff News Rocks Market – Best Strategy For Traders?

On “Liberation Day” President Donald Trump announced his tariff plan, and it certainly didn’t impress the market. The plan includes high tariffs on imports from other countries, some of the highest in decades. This news has caused a strong reaction in financial markets. Stocks have dropped significantly, crypto prices have fallen, and traders are feeling uncertain and worried. With this situation unfolding, what’s the best approach for traders right now?

Trump’s tariff plan is designed to increase U.S. production by adding taxes to goods imported from other countries. While full details are still unclear, early reports suggest tariffs could reach levels not seen since the 1930s, a time linked to the Great Depression. The idea is to encourage manufacturing in the U.S. and reduce dependence on foreign supply chains, a key part of Trump’s economic goals. However, some experts warn that this could lead to trade disputes, raise costs for consumers, and affect global economic stability.

This announcement comes when markets were already uneasy, with investors focused on inflation, interest rates, and international tensions. The addition of tariffs has increased uncertainty and led to a clear market response.

Our portfolios got liberated pic.twitter.com/BOse6vMZBX

— Quinten | 048.eth (@QuintenFrancois) April 3, 2025

Market Reaction To Trump’s Liberation Day: Stocks and Crypto Are Going Down

The financial markets reacted quickly. The S&P 500 has fallen over 7% since the tariff news began circulating, with additional declines of more than 1% in after-hours trading on April 2. Companies that rely on imported goods, such as those in manufacturing, retail, and technology, have seen the largest drops as investors expect higher costs and lower profits.

Crypto have also been hit hard. Bitcoin, a major indicator for the crypto market, dropped over 6% after the tariffs news. The price touched its support around $82,000, and now it’s trading at $83,600.

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Some compare this to past tariff increases, like the Smoot-Hawley Tariff Act of 1930, which hurt global trade during the Great Depression. While today’s situation differs, there’s growing concern about a possible recession, two-quarters of negative GDP growth, perhaps starting late in 2025.

Traders are facing a mix of fear and doubt. They’re worried about ongoing losses and unsure about the broader effects of the tariffs. Will other countries respond with their own tariffs? Could supply chain issues drive inflation higher? How will the Federal Reserve react? These unanswered questions have left markets unstable, with volatility rising and confidence dropping.

Bitcoin, Tariffs & Market Turbulence: 5 Tactics to Protect Your Portfolio

Still, this uncertainty could create opportunities for those who adjust their approach and plan carefully.

1. Wait for Bitcoin to Stabilize at Key Levels: Bitcoin’s recent drop has pushed it toward the $82,000 support level, with resistance around $86,000. Rather than chasing short-term dips, wait for confirmation of a bottom. For example, Bitcoin holding above $82,000 for a few days or a breakout above $87,000. This reduces the risk of catching a falling knife in a volatile market. The $78,000-$82,500 range could be a fundamental price zone to watch.
2. Scale In During Consolidation: Instead of going all-in, consider dollar-cost averaging (DCA) into Bitcoin over the next few weeks as it consolidates. The tariff news has introduced choppy price action, and scaling in around support levels (e.g., $82,000) lets you build a position while managing risk. If Bitcoin falls below $82,000, the next support, which is nearly $78,000, could be a buying opportunity if volume picks up.
3. Watch Stablecoin Liquidity: Bitcoin often moves with shifts in stablecoin supply. Analysts note that USDT and USDC liquidity impulses (30-day market cap changes) are starting to turn positive after earlier declines. A stronger expansion in stablecoin liquidity—say, USDC growing beyond its current 20% pace—could signal fresh capital entering Bitcoin, making it a key event to monitor in April. This could lift Bitcoin out of its current range.
4. Hold Stablecoin: Keep a portion of your portfolio in stablecoins or cash (e.g., 30-50%) until the tariff fallout becomes clearer. Countries have until April 9, 2025, to negotiate before tariffs take effect, and any softening of Trump’s stance could spark a relief rally in Bitcoin. Holding liquidity lets you act on dips or breakouts without being fully exposed to downside risk.
5. Key Event to Watch – White House Crypto Summit: The first White House Crypto Summit, scheduled for April 11, 2025, could provide insight into Trump’s broader crypto policy, including his proposed strategic crypto reserve. If the administration signals concrete steps, like government Bitcoin purchases, it could boost confidence. This event is worth waiting for before making big moves.

After the tariff announcement late on April 2, Bitcoin fell from near $88,000 to around $82,000. As U.S. markets open today at 9:30 AM EST (3:30 PM CEST), expect continued volatility but not necessarily a deeper sell-off. The initial shock may already be priced in, as traders had days to digest tariff rumors. However, if stocks drop more (e.g., S&P 500 down another 2-3%), Bitcoin could test $80,000 briefly before stabilizing. A relief bounce to $84,000-$85,000 is possible by day’s end if panic selling eases.

For traders, the key lies in balancing risk management with the pursuit of opportunities. The crypto market, renowned for its resilience, consistently presents new possibilities. There’s no harm in pausing to assess and await the most promising moment to act.

EXPLORE: EOS Crypto Defies Trump Tariff Crash: Is EOS the Best Crypto to Buy?

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