Trade War Fury: Asia’s Markets Crushed, Recession Fears Soar
Asian markets began the week of April 7 with steep drops across major indices, including Hong Kong’s Hang Seng Index, which plunged more than 13% in the first few hours of trading. Tech stocks Alibaba and Baidu led the decline, falling 17% and 14%, respectively, at the time of this report (1:30 a.m. EST).
The Hang Seng Index’s drop, described as its worst 24-hour decline since 2008, pushed the index more than 20% below its March peak. A Reuters report said the rout, which it described as the largest one-day decline since 1997, prompted China’s sovereign wealth fund to intervene. In mainland China, facing U.S. tariffs of over 50%, the key blue-chip index ended 7% lower.
The plunge of Chinese markets followed Beijing’s decision to impose a 34% tariff on U.S. goods, a move that confirmed the start of a trade war between the world’s two largest economies. Many economists and observers fear the escalating trade war will worsen conditions for both countries. The trade war has also led some investment banks to increase the odds of a U.S. economic recession.
Despite growing calls for de-escalation, top U.S. officials, including President Donald Trump, have refused to back down. Speaking to reporters on April 7, Trump insisted that imposing reciprocal tariffs was the right response to unfair trade practices by other countries.
In Japan, the Nikkei index was down 8%, and the TOPIX Banks Index’s fall of more than 12% reportedly triggered circuit breakers on TOPIX futures. In Europe, the United Kingdom’s FTSE 100 index opened nearly 6% lower, and Germany’s DAX plunged almost 10% at the start of trading.
The turmoil also affected other asset classes, including bitcoin, which briefly fell below $75,000, its lowest since Nov. 8. Although the cryptocurrency rebounded to just over $77,000 at the time of this report, it remained only a few thousand dollars above its pre-U.S. election level of just under $70,000.
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Bitcoin Price Watch: Bearish Momentum Builds Across All Timeframes
On the daily chart, bitcoin’s price action has shifted significantly downward, falling from a local high near $94,422 to approximately $74,434. The presence of consecutive bearish candles and increasing bearish volume indicates strong selling conviction. While psychological support may exist around the $74,000 mark, no technical bottom has formed yet. The chart reflects bearish dominance, but an oversold bounce could materialize if momentum pauses. Traders should watch for a bullish engulfing or hammer pattern near $74,000 as a potential entry signal, while failed rallies toward the $78,000–$80,000 zone may provide shorting opportunities.
BTC/USD 1D chart via Bitstamp on April 7, 2025.
The 4-hour chart reinforces the bearish sentiment with a massive bearish engulfing candle printed near $88,563, marking the beginning of a downtrend characterized by lower highs and lower lows. A short-term support zone appears to be holding around $74,434, but volume has decreased since the initial breakdown, pointing to potential exhaustion. While there is room for a temporary bounce to $78,000–$79,000, the prevailing trend remains bearish unless that level is reclaimed decisively. Scalp longs are feasible above $75,500 with tight stops, while shorts can be considered at the $78,000–$80,000 resistance zone.
BTC/USD 4H chart via Bitstamp on April 7, 2025.
On the 1-hour chart, bitcoin’s decline from $83,741 to the recent low around $74,434 illustrates a rapid loss in value, followed by a weak relief rally. The lack of volume accompanying the bounce signals a lack of conviction from buyers. If price action continues forming lower highs, such as around $77,000, it could serve as a near-term short entry level. Conservative buyers might await a retest and confirmation bounce from $74,500–$75,000, whereas intraday traders could consider long entries above $77,500 only if volume confirms.
BTC/USD 1H chart via Bitstamp on April 7, 2025.
Oscillators offer mixed signals, with the relative strength index (RSI) at 33.9, stochastic at 19.2, and commodity channel index (CCI) at −265.6 — all in neutral territory, though pointing to potential oversold conditions. The momentum indicator registers −7,657.0, signaling a buy, while the moving average convergence divergence (MACD) level of −1,750.1 remains bearish with a sell indication. This divergence suggests a possible but unconfirmed reversal opportunity if downward momentum begins to ease.
The moving averages align closely with the bearish theme. Every key short- and long-term moving average — including the 10-period exponential moving average (EMA), 20-period EMA, 50-period simple moving average (SMA), and even the 200-period SMA — signals a bearish outlook. With bitcoin’s current price below all major moving averages, trend-following models suggest staying cautious on long positions unless a structural shift occurs. In summary, despite hints of an oversold bounce, prevailing technical signals favor bears in the near term.
If bitcoin can hold support around the $74,000–$75,000 zone and print a clear reversal pattern with increasing volume, a recovery toward the $78,000–$79,000 resistance range becomes plausible. Oscillator data showing potential oversold conditions supports the likelihood of a short-term bounce, giving bulls a narrow window to reclaim momentum.
With every major moving average aligned to the downside and volume confirming the bearish trend across all timeframes, bitcoin remains under sustained selling pressure. Unless price action decisively reclaims and holds above the $78,000–$80,000 resistance, bears retain control and could drive the price lower toward or below the $72,000 threshold.
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Block’s Jack Dorsey: Bitcoin Could Fail Due to Irrelevance
The current state of bitcoin adoption and the cryptocurrency’s status as digital gold and a store of value are being criticized by bitcoiners who advocate for a more practical function. Jack Dorsey, CEO of Block, a bitcoin tech company currently working on creating its own bitcoin mining solutions, believes that bitcoin can still fail at this stage by becoming irrelevant to addressing the problems it was first designed to solve.
At the Presidio Bitcoin’s 21 in 21 podcast, when asked about the possible causes of a hypothetical bitcoin failure, Dorsey remarked that irrelevance might cause bitcoin’s downfall in the long term, signaling a shift toward payments as one of the elements to prevent this outcome.
“I think it has to be payments for it to be relevant uh on the everyday otherwise it’s just something you kind of buy and forget and only use in emergency situations or when you want to get liquid again,” Dorsey assessed, remarking payments as the main driver behind the adoption that would save bitcoin.
Later in the podcast, Dorsey mentioned payments again as the main mitigating solution to a hypothetical bitcoin failure outcome. He noted that to prevent this ill fate, bitcoiners need to be “building simple, accessible experiences that solve the payment use case making it scale making it fast like giving the speed of the Visa and Mastercard networks real competition.”
Dorsey also criticized bitcoin’s lightning network, the microtransaction-oriented layer 2 protocol, calling to open bitcoin for more complementary protocols to be launched, considering elements such as ease of use and practicality. “I think we can do better than lightning, and it’s not that like lightning is bad, it’s just challenging,” Dorsey concluded.
Read more: Jack Dorsey’s Block Bets Big on Bitcoin Mining
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Historic: Cryptocurrency Assets Are Now Legally Seizable in Brazil
Cryptocurrency is being acknowledged and integrated into the international legal and economic system. The National High Court of Brazil (STJ) issued a landmark decision establishing that crypto could be seized as payment for outstanding debts.
The case, which has now put the digital assets system in the sights of the judicial system, enables a new set of opportunities to redeem debts from actors that have not used the traditional finance system for storing funds.
The court based its decision on the fact that cryptocurrencies are assets liable to taxation, whose transactions must be reported to the Federal Revenues Service, and even if not legal tender, these can be used as a form of payment and a store of value.
Nonetheless, in its decision, the entity recognizes that there are operational difficulties regarding seizing digital assets, as they can be moved out of the regulated exchanges. In this sense, the court commented that a new system designed to facilitate this kind of action is already being developed.
The ruling states that:
The implementation of a system like this will undoubtedly make it simpler and faster to search for crypto assets owned by the executed party and carry out the respective seizure on them.
The appeal solves a controversy created by an earlier request to a court to seize cryptocurrency assets. Before, the First Chamber Reserved for Business Law of the Court of Justice of Sao Paulo denied this request, arguing that there is a lack of regulation regarding the commercialization of these assets in Brazil.
In the same way, it also established that allowing these searches would break the financial confidentiality of the executed party without adding any value to solve the creditors’ requirements.
Read more: Federal Revenue Agents Might Seize Bitcoin From Travelers in Brazil
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