Bitcoin’s price trajectory remains under pressure as a mix of economic data and geopolitical tensions weigh heavily on investor sentiment. Despite recent U.S. inflation data showing a promising decline, the broader financial markets—including cryptocurrencies—are feeling the heat from fresh trade policy concerns.

On Friday, Bitcoin dipped below the $80,000 threshold, marking a 1.6% loss over the past 24 hours. This decline followed the release of the March U.S. Consumer Price Index (CPI), which showed inflation cooling to 2.4%, a notable drop from February’s 2.8% and slightly better than the 2.5% expected by analysts. While such figures typically boost market confidence and support risk assets like crypto, that wasn’t the case this time.

The CPI, published monthly by the U.S. Bureau of Labor Statistics, plays a critical role in shaping the Federal Reserve’s interest rate decisions. Normally, easing inflation would reduce the chances of rate hikes, encouraging capital flow into assets like Bitcoin. However, despite the softer inflation print, equity markets stumbled. The S&P 500 slid by 3.4% while the Nasdaq fell 4.3%, reflecting investor unease.

This market turbulence spilled into the crypto space as well. The total cryptocurrency market capitalization shrank by 2.8% in the past day, suggesting that inflation relief wasn’t enough to offset the broader macroeconomic fears now gripping markets.

A key driver of this anxiety is President Trump’s evolving trade strategy. On April 9, Trump has pause 90-day on planned tariff hikes and introduced a new 10% reciprocal tariff on imports from most nations—excluding China. In contrast, tariffs on Chinese goods were sharply increased to 125%, citing Beijing’s failure to comply with fair trade norms.

Initially, markets welcomed the pause in escalating trade tensions, and Bitcoin responded positively, briefly rallying over 7% to $82,000. However, optimism was short-lived. China quickly retaliated with an 84% tariff on U.S. imports starting April 10, reviving fears of a drawn-out trade conflict. The potential for a renewed U.S.-China trade war has created fresh uncertainty, particularly around what may happen when the 90-day grace period ends.

According to analysis from The Kobeissi Letter, the current environment—featuring robust job growth alongside cooling inflation—might embolden Trump to double down on tariffs without facing immediate political backlash. This could undermine the progress made in fighting inflation and contribute to future economic instability.

Meanwhile, the Federal Reserve seems unlikely to step in with rate cuts in the near future. Data from CME Group’s FedWatch Tool indicates an 81.5% probability that the Fed will maintain current rates at its next meeting on May 7. With rate cuts now pushed to at least June, Bitcoin investors are left navigating an increasingly uncertain macro backdrop.

Adding to the bearish signals, capital inflows into Bitcoin have seen a dramatic slowdown. On-chain analytics firm Glassnode reported a 90% plunge in Bitcoin inflows—from a peak of $100 billion to just $6 billion—highlighting waning investor enthusiasm amid market volatility.

From a technical standpoint, Bitcoin’s current price action is also cause for concern. If BTC fails to hold above the $80,000 support level, analysts warn it could drop further toward the 356-day exponential moving average near $76,000. Below that, significant support zones lie at the active realized price of $71,000 and the market mean around $65,000—levels typically defended by long-term holders. A break below these could signal further downside ahead.

As market forces continue to clash, Bitcoin’s path remains uncertain, driven not only by economic indicators but also by unpredictable global trade developments. Investors will be closely watching both Washington and Beijing as the next chapter of this financial standoff unfolds.