Punitive tariffs on Mexico, Canada and China could go into effect Tuesday.
Updated Feb 28, 2025 16:57 UTC Published Feb 28, 2025 16:53 UTC
What is important to know:
- Bitcoin jumped sharply in U.S. trading on Friday as the cryptocurrency fear and greed index reached levels not seen since the peak of the 2022 bear market.
- For a long time now, weekends have not been conducive to growth in cryptocurrency prices.
- However, this time the negative news may be more than priced in.
The price of Bitcoin (BTC) rose to around $84,000 in U.S. morning trading on Friday after falling to $78,000 overnight, but remains down more than 15% from a week ago.
The cryptocurrency fear and greed index fell overnight to 10 — a level not seen since the peak of the 2022 bear market — but has since risen and is now at 16. That’s still in “extreme fear” territory and well below last week’s 55 (in “greed”). Levels above 75 are considered “extreme greed,” and the index hasn’t been there since around the time of Trump’s inauguration.
Even with Friday's gains, Bitcoin was down more than 1% from 24 hours earlier, and the broader CoinDesk 20 index was down about 2%.
The only cryptocurrency to show gains among the major assets is Solana (SOL), which has gained 5% since CME announced on March 17 that it would add SOL futures to its crypto platform. However, SOL is still down 36% over the past month and well below the levels it was at before Donald Trump won the election in November.
The weekend is coming
All major stock markets are, of course, closed on weekends. Even the forex market, touted for years as the market that never sleeps, actually closes between Friday and Sunday. Cryptocurrencies, however, have no such breaks, but traders are understandably demanding them.
Jeff Kendrick of Standard Chartered noted a couple of weeks ago that weekends haven't been great for Bitcoin recently. While this weekend was modestly positive for the world's largest cryptocurrency, it had been on a sharp downward trend in prices before that.
“Will risk assets really rally this weekend if we have bad news?” Kendrick asked in a note Friday morning. His answer is likely to be no.
The alternative is that they might do it anyway. After all, macroeconomic risk — at least as defined by President Trump’s aggressive tariff policies — may be fully priced in. He has promised 25% tariffs on Mexico and Canada and 10% on China this Tuesday. How could things get worse? Is it possible he will raise them to 50%?
Instead, given the significant price drop (stock markets have also fallen this week), bears could find themselves in the most risky position over the next 48+ hours if, for example, a deal is reached that prevents or significantly delays the imposition of tariffs.
Buckle up.
