So the White House scaled back to narrower, targeted reciprocal tariffs, which means bearish market expectations might be above what actually comes to fruition. April 2 still remains the most important date for markets (>>> FOMC), and it’s going to be less about tariffs and more about credibility.
Regardless of structural considerations like easing inflationary pressures, reducing short-term volatility, and actual tariff implications (blah blah), what really matters is the narrative decay: if Trump backs off or scales down, he will no longer move markets, and his leverage weakens.
Then markets can stop worrying about uncertainty, which is always positive for sentiment and price action.
He’s in a tough spot at the moment because it’s a make-it-or-break-it type of moment. Knowing how much he cares about his leverage on negotiations, I’d say everything is still a game and he pushes for something harsh-ish, but I think there’s more constraints around and this is indeed a blink on what we’ll actually get on April 2nd, with overly hawkish expectations likely priced in.
And we’ve actually seen this before: 2018–19 offered the same pattern of headline bluster with delayed follow-through which led to gradually fading impact. Markets don’t wait forever and they like to test narratives.
This would be supportive for crypto in the near term, especially if liquidity conditions remain loose—hello slowdown of Quantitative Tightening!—and the dollar stable.
We still have the broader backdrop: a US Government committed to reducing their massive fiscal deficit in record time, and the resolution of the debt ceiling situation; but the removal of tariff pressures would give us enough relief to make us happy.
April 2 = either the peak of tariff fear or the start of something real. Given the latter is more priced in than the former, and with odds of a genuine scale-back rising, the R:R is starting to favor looking for longs.