- In a conversation with ForkLog, experts discussed the consequences of US trade wars for the crypto market and outlined its likely trajectory.
- Ethereum has outpaced bitcoin by growth rate, yet remains undervalued.
Investors are returning to risk assets, particularly the technology sector, which had been under pressure from trade disputes. So said trader and Coen+ Telegram channel author Vladimir Koen in comments to ForkLog.
He noted that all markets reacted positively to news of an agreement between the US and China:
- Nasdaq 100 futures added 3.9% in 24 hours;
- S&P 500 futures rose 3%;
- DXY reached 101.8 — the highest since April 10;
- bitcoin tested $105,000.
«It is important to understand: the agreement is simply a 90-day moratorium. The trade wars are not over, and for many reasons it is beneficial for [US President Donald] Trump to continue them. He clearly, together with his closest circle, is making good profit from his announcements, because before the rally in early May hedge funds and large institutional investors were quite actively getting rid of bitcoin,» Koen noted.
In the speaker’s view, tariffs have a long-term negative impact on the economy and inflation, and they also slow the US central bank’s rate cuts. At the same time, the pump that occurred on May 8 “clearly looks like insider trading,” because large purchases began before the announcement of talks between the US and China.
He added that the United States made very large concessions, since cutting tariffs from 200% to 10% is “a bow” to China. Scrapping tariffs on all electronics is not in America’s interest, but Trump needs to maintain voter support. In his first 100 days in office, the president set a record low approval rating among re-elected presidents.
«The US trade deficit with respect to China is so large that Trump will not be able to eliminate it over the next three years. He set such a task in his previous term, but did not fulfill it. Trade wars will continue to cause market volatility. This suits the president. But a gradual decline is inevitable, since tariffs hit consumers,» he stressed.
Prospects for digital gold
Given the easing of tariff tensions, trader Artem Zvezdin forecasts bitcoin rising to $120,000–130,000. However, it will struggle to break higher because of the geopolitical backdrop elsewhere:
«The issue of Ukraine and the corresponding crisis is coming to the fore. It is not particularly clear how it will end.»
Koen also considers a new all-time high for bitcoin in May possible.
The main drivers of the first cryptocurrency’s growth remain inflows into US spot exchange-traded funds (ETFs) and buying by Strategy.
«A surge of bitcoin into the $108,000–110,000 range is quite realistic if Michael Saylor continues buying at the same pace. But a new stage of growth and the achievement of an all-time high will likely come after the Federal Reserve cuts rates — in June or July. Looking ahead, I expect that bitcoin could well reach $150,000 this year. Possibly even higher; it depends on how active institutional investors will be,» the expert explained.
According to Koen, the growth of digital assets is restrained by the delay in adopting crypto legislation in the US. If a stablecoin bill is passed soon, it would give the market a serious boost.
Crypto-friendly rules would attract large players, who would be more willing to invest in risk assets. In a positive scenario, digital gold could jump to $180,000, the trader added.
However, Zvezdin warned that the main wave of hype has subsided and capital from interested participants is already in the market. Therefore, a push above $130,000 will be difficult for bitcoin.
«To those who expect bitcoin to jump to $300,000–400,000 in this cycle, I would recommend looking at the capitalization and doing the math. All the money in the world cannot be in cryptocurrency,» the specialist said.
Reasons for Ethereum’s rise
Over the past seven days, the second-largest cryptocurrency has gained almost 40%, reaching $2,500. The asset outpaced bitcoin, which rose 9% over the week.
Koen noted a strong support level for ETH at $2,400–2,500 and forecast further growth.
«This spring we observed the highest level of negative sentiment toward Ethereum since 2018. We did not see such negativity even in the bear market of 2022. This is because people ended up underwater, and many hodlers had been holding coins since 2021. A huge wave of negativity also came from new investors who entered the market and began buying the asset following Trump’s company, World Liberty Finance,» the trader explained.
The last weekly candle at +45% delivered the biggest increase since 2020. Now Ethereum looks undervalued compared with bitcoin, Koen said. The Activation of the Pectra hard fork served “just as a trigger.”
The expert named $2,800–3,000 as the nearest target for the coin. Potential drivers include the RWA segment, whose capitalization has already exceeded $22 billion, and increased inflows into ETFs.
Zvezdin also noted that Ethereum’s rise was “long overdue.” He linked the positive dynamics to a rotation of funds from the first cryptocurrency into the second.
«A classic altseason occurred. It had been expected by market participants for quite a while, so some investors began reallocating into ETH. Accordingly, the coin rose, as did other assets,» the speaker added.
Standard Chartered has urged investors to buy the first cryptocurrency and forecast a rise to $120,000 in the fourth quarter.