Trump Pressuring for Rate Cuts? How It Could Affect BTC Trends

Trump’s Push for Rate Cuts and the Crypto Market Connection

Recently, U.S. President Trump has repeatedly called on the Federal Reserve to accelerate rate cuts, even hinting at pressuring current Chair Powell to adjust interest rate policies. This development has attracted significant attention from cryptocurrency investors, as it could become a major factor influencing the prices of Bitcoin, Ethereum, and other assets.

Historical data shows a notable correlation between interest rate policies and the crypto market. For example, when the Fed slashed rates close to zero during the 2020 pandemic, Bitcoin’s price surged from $3,800 to $69,000, setting a historic high. Conversely, during the 2018 rate hike cycle, Bitcoin fell by over 80%. Currently, Trump argues that his tariff policies may slow down the economy, advocating for rate cuts to release liquidity and hedge against risks. However, the Fed remains concerned about inflationary pressures, intensifying the tug-of-war and increasing market uncertainty.

Current Market Dynamics and Potential Impact

As of April 2025, Bitcoin prices have been fluctuating widely between $75,000 and $95,000, reflecting investor ambivalence over rate cut expectations. Some analysts believe that if the Fed concedes and initiates rate cuts, Bitcoin could replicate the 2020 rally, with target prices surpassing $100,000 to kick off a new bull run. Meanwhile, mainstream tokens like Ethereum, Cardano, and sectors like DeFi (including lending protocols and decentralized exchanges) could also benefit from a resurgence in risk appetite.

However, potential risks cannot be ignored. Trump’s tariff policies could drive up import prices, leading to “stagflation” (high inflation + low growth), forcing the Fed to maintain high rates. Additionally, Bitcoin has recently failed several times to break the $96,000 resistance level, suggesting a possible short-term pullback to around $89,000 according to technical analysis. For regular investors, this means paying close attention to both macroeconomic policies and technical market signals.

Investors can use JuCoin’s market analysis tools to track Bitcoin’s price fluctuations and key support/resistance levels in real time.

How Should Investors Respond

In a complex policy environment, crypto asset allocation needs to balance long-term logic with short-term volatility. Suggested strategies include:

1. Prioritize Core Holdings: Maintain Bitcoin as the foundational asset, as it is most sensitive to liquidity and interest rate changes. Historical data shows BTC’s average gain during rate cut cycles exceeds 300%.

2. Diversify Risk: If rate cuts materialize, consider moderate allocations to tokens like Ethereum, Solana, SUI, or highly liquid DeFi protocol tokens such as Uniswap and Aave.

3. Watch for Policy Turning Points: Closely monitor the Fed’s May interest rate decision and Powell’s remarks on inflation. If “higher for longer” is confirmed, adjust positions promptly.

Key Indicators for Future Trends

• Fed Policy Signals: Watch non-farm payroll data, CPI inflation rates, and public statements from Fed officials.

• Bitcoin Technical Breakouts: Whether BTC can break through $96,000 will determine short-term market sentiment.

• Regulatory Moves: Changes like the repeal of SAB 121 by the SEC regarding crypto custody could attract more institutional funds.

Regardless of rate cuts, the cryptocurrency market will remain deeply intertwined with macroeconomics. Investors must stay rational, avoid relying too heavily on single news events, and adopt diversified strategies to balance returns and risks.