Tariff shock hits risk; Trump’s 10% global levy takes effect, Bitcoin rebounds to $65.9K as the dollar stays bid
Digital Asset Market: Bitcoin snapped back to around $65,900 after briefly trading as low as ~$62,700, with the broader tape still risk-sensitive as the U.S. Dollar Index held above ~97 and equities remained choppy. Traders still have $60,000 circled as the next major liquidation/flows threshold, where a clean break can accelerate forced selling and reopen a deeper support zone in the low-to-mid $50Ks. Derivatives positioning is mixed rather than outright capitulation: total crypto open interest is ~$44.1B (+2.28% 24h), while BTC open interest is ~$20.3B (+0.91% 24h), and 24h liquidations are ~$159M split fairly evenly (~$75.8M longs vs ~$83.5M shorts), with BTC liquidations at ~$56.9M (longs ~$38.0M). Funding is no longer uniformly negative, but it’s still fragile with meaningful dispersion across venues (some slightly positive, some still negative), consistent with a market that’s de-risked but not fully washed out. On the sentiment side, BTC’s 14-day RSI dipping below 30 is a clear “oversold” signal historically associated with consolidation rather than an immediate V-shaped reversal, while DeFi TVL has been comparatively resilient to spot volatility, supporting a case for a tactical bounce if macro pressure eases.
Macroeconomics: President Trump’s new 10% global tariffs took effect early Tuesday after he signed an executive order late Friday invoking Section 122 of the Trade Act of 1974, a move aimed at keeping a tariff regime in place after the Supreme Court invalidated his broader “Liberation Day” duties that relied on emergency powers. The White House has threatened to raise the levy to 15%, and reports say officials are drafting a formal order, though the timing is unclear. US Customs and Border Protection said it will stop collecting tariffs imposed under the IEEPA, raising the prospect of more than $100 billion in refunds to importers. The uncertainty has disrupted trade talks and prompted scrutiny of existing agreements, with EU lawmakers delaying a ratification vote and an EU assessment suggesting the new tariff may breach the deal, while Japan has asked the US to ensure any new measures do not leave it worse off than last year’s agreement. Section 122 allows tariffs up to 15% for 150 days without congressional approval, after which Congress would need to approve an extension.
Equities: US stocks opened higher Tuesday as investors tried to rebound from Monday’s AI-driven sell-off, with the Dow up about 0.8%, the S&P 500 up roughly 0.4%, and the Nasdaq up about 0.5%. AMD jumped as much as 10% after striking a deal to supply Meta with large volumes of GPUs for AI infrastructure. Markets remained uneasy as President Trump’s new 10% global tariff took effect, with reports that the White House is considering raising it to 15% and pursuing national security probes that could enable more sector tariffs, while investors watched for signals in Trump’s State of the Union address. Attention also focused on an Anthropic virtual event where the company announced new enterprise tools and plug-ins, helping lift FactSet shares about 6% and Salesforce and DocuSign around 5% amid ongoing debate about how quickly AI could reshape corporate services.
The Fed and US Treasury: Chicago Fed President Austan Goolsbee said the Fed should not cut interest rates until there is clearer evidence inflation is returning to the 2% target, warning policymakers not to repeat past mistakes of assuming inflation is temporary. He noted core PCE inflation was 3% in December and said stalling at that level is unacceptable, with particular concern about persistently high housing and services inflation that is not explained by tariffs, so the Fed must remain vigilant rather than front-load cuts. Markets expect the FOMC to hold steady until at least June or July after three quarter-point cuts in late 2025, while Governor Christopher Waller said tariff effects should largely be looked through, but stronger labor data could reduce the need for cuts. Separately, Governor Lisa Cook cautioned that AI-driven productivity gains could keep growth strong even if unemployment rises, meaning the Fed’s usual demand management tools might struggle to reduce AI-related joblessness without adding inflation, echoing other officials who suggest AI could push the neutral rate higher and is not a clear reason to lower rates.
Geopolitical: President Trump, after ordering the largest US military buildup in the Middle East since the Iraq War, is weighing three main paths on Iran: continue diplomacy, conduct a limited strike, or pursue a broader campaign aimed at undermining or toppling the regime. His team is holding indirect talks, with Steve Witkoff and Jared Kushner heading back to Geneva, but a central impasse remains since Trump demands Iran end all uranium enrichment while Iran insists enrichment is a sovereign right and a matter of national pride, making a breakthrough uncertain. A limited strike option would target missile sites, nuclear linked facilities, or IRGC infrastructure to pressure Tehran, but officials warn it could trigger retaliation on US forces and may harden Iran’s stance rather than force concessions. A larger operation would involve extensive waves of strikes against air defenses, missile production, nuclear sites, and possibly leadership targets, yet Pentagon leaders have raised concerns about complexity, casualties, strain on deployments and stockpiles, and the lack of clarity about what or who would follow Iran’s current leadership. Risks far outweigh any benefits for the USA in this war, and it is hoped that cooler heads prevail, with the administration heeding the public's will.
View from our desk
Liquidity vacuum, not “dip buying”
Bitcoin snapped back to around $65,900 after briefly trading as low as ~$62,700, but the tape still looks sponsorship-light with macro sensitivity intact as the U.S. Dollar Index held above ~97 and equities stayed choppy. The market is still anchored on $60,000 as the next major liquidation and flows threshold, where a clean break can accelerate forced selling and reopen a deeper support zone in the low-to-mid $50Ks. That framing, liquidation levels over demand zones, is not the posture of a confident bull tape.
Derivatives are mixed, de-risked, and still fragile
Positioning looks more like controlled de-risking than outright capitulation: total crypto open interest is ~$44.1B (+2.28% 24h) and BTC open interest is ~$20.3B (+0.91% 24h), while 24h liquidations are ~$159M split fairly evenly (~$75.8M longs vs ~$83.5M shorts), including ~$56.9M in BTC liquidations (~$38.0M from longs). Funding is no longer uniformly negative, but dispersion across venues remains wide, consistent with a market that’s been de-levered but not fully washed out. On sentiment, BTC’s 14-day RSI below 30 is a legitimate oversold flag that often maps to consolidation rather than an immediate V-shaped reversal, while DeFi TVL has been comparatively resilient versus spot volatility, supporting a case for a tactical bounce if macro pressure eases.
Integrate or get abstracted: Visa, Mastercard, and stablecoin settlement
Visa and Mastercard do not lose because stablecoins exist. They lose if stablecoin settlement becomes the default behind the scenes and the networks do not control the orchestration, risk, and standards layer on top. Consumers already “pay digitally,” but a meaningful share of treasury and cross-border flows is still not always available at or programmable for settlement. Stablecoins compress settlement from days to near-real time and make funds movement software-native, typically starting in markets and treasury flows before expanding into everyday commerce. The path forward for networks is clear: clear and settle in stablecoins where it makes sense, wrap it in compliance, dispute, and fraud controls, and keep distribution. Treat it as an edge case, and value migrates up the stack to issuers, wallets, fintechs, and orchestration platforms that set the operating standard.
Happy Trading!
The 1Konto Team
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