Macauley Peterson

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/0xresearch" target="_blank" rel="noreferrer noopener">subscribe</a>.



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If I had a nickel for every time I’ve heard the adage about “putting the toothpaste back in the tube” applied to the <a href="https://blockworks.co/news/tariffs-effect-economy-recession-gdp-trump">Trump tariffs experiment</a>, I could buy…oh, a small fraction of a bitcoin.



As much as we might wish the chaos to subside, the norms of mutually-beneficial global trade may <a href="https://x.com/yeluacaM/status/1909519077355184558">simply be over</a>.



BTC is regarded as holding up relatively well, but as I see it, it’s more so hanging on by a thread. The kitten “hang in there” meme, if you will. Bitcoin yesterday narrowly avoided closing much below its March lows. (Technically it was lower, but within a fraction of a percent, depending on your source, including CME.)



So there’s hopium that the daily downtrend may yet reverse. Short term, with the <a href="https://blockworks.co/news/vix-volatility-index-market-increase-tariffs">VIX touching 60</a> yesterday — an extreme level rarely seen — you’d expect at least a reflexive bid. Both the Nasdaq and S&amp;P 500 tagged their April 2024 lows by end of day Monday, essentially wiping out the past year’s gains. But BTC is still up 30% year over year.



Bitcoin’s “decoupling” narrative was short-lived. On a 30-day rolling basis, BTC’s correlation with the Nasdaq remains above 0.5 — historically high, as FalconX head of research David Lawant wrote in a note today.



Its momentum to the downside means that bounces likely set up a lower high to fade. “The trend is your friend,” and so on. Still, there has been less panic among bitcoin holders compared to both the August 2024 yen carry trade unwind and the 2020 Covid crash, when BTC fell noticeably harder than stock indices.



That doesn’t make BTC a safe haven, but it does say something. MEXC COO Tracy Jin attributes the relatively muted selling to institutional investor accumulation. “The asset is becoming an increasingly important part of a balanced portfolio,” Jin said, citing persistent inflation and recession fears as long-term tailwinds.



What else is avoiding meltdown?



“Pockets of strength are few and far between — TRX, OM and XRP are holding up relatively well while most large caps continue to lag,” wrote Wintermute trader Jake O. “This underperformance is fueling renewed BTC dominance, which has climbed back to around 65% — its highest level since March 2021.”



Speaking of XRP, in another sign of our bizarre times, Standard Chartered published an analysis suggesting it could have an FDV of $1 trillion by 2028. This notion is one I regard as beyond delusional. Ripple just <a href="https://www.financemagnates.com/trending/is-xrp-going-up-as-trumps-tariffs-raise-talk-of-global-financial-shift/">ponied up</a> $1.25 billion for a prime broker, Hidden Road, presumably in an effort to juice activity for its ledger. XRP is far and away the most expensive asset in crypto that virtually no one in crypto actually takes seriously.



“XRP is the social indicator in crypto, more so than even Doge,” mused Blockworks Research analyst David Rodriguez. “It’s a gateway drug for non-technical people.”



XRP’s run up in the past year is one of the more baffling phenomena we’ve witnessed, a testament to the cult mindset of its retail holder base, corralled by TikTok and YouTube influencers.



The ultimate irony would be if crypto’s version of a GME memestock could parlay its market cap into acquiring actually useful businesses to such an extent that it actually becomes relevant.



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Bitcoin’s fragile bid in a fractured world

Katherine Ross

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire" target="_blank" rel="noreferrer noopener">subscribe</a>.



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So much for any hope around an altcoin resurgence.&nbsp;



Unfortunately, as folks have taken risk off the table in the wake of the tariffs, they’ve also moved further away from altcoins.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXci2uHqcRFuVnZF-MAH28pqpWhjeTzCl2NjtYKFu-6zu0vk2_Z8rhV4r-SKspzl7tF5FQUIXhCPotjlx2wkFMKV4_SRTi3yXtP0H8KhDiHLAAREx6Jc4aj7T4Vb6j0_Kgfu-N_5rw?key=pQ8ZBjUt_nktM-hhsM0-HMaW" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://www.binance.com/en/research/analysis/tariff-escalation-and-crypto-markets/">Binance</a> </figcaption></figure>



Since the announcement, liquidity “for the top ten altcoins and ETH decreased by 12% and 8%, respectively, indicating a more cautious stance,” Kaiko Research noted.&nbsp;



All of this shows that capital is being sidelined right now as folks figure out how to approach this precarious market — a market that may be heading toward a cliff of sorts after China responded to President Donald Trump’s threat about new, additional 50% tariffs against the country. China has promised to fight the US on the tariff front, which could set us up for more market tension, given that China was handed a Tuesday deadline (that’s today!) to scrap its retaliatory tariffs.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcuIanvT7-JJl896GLy2nBgYweYFkn16I0XyzwinpTey7nr5WCRlViVa15ndkrg6_IgycDJOV50Ev6XFL6HSSp2-NA_hl00UNlITUGKPgl7L46L1R333eTHpmCSC4Z4dmZ3QrD6?key=pQ8ZBjUt_nktM-hhsM0-HMaW" alt=""/><figcaption class="wp-element-caption">Looking at the correlation of bitcoin, the S&amp;P 500, and gold</figcaption></figure>



While CT initially hoped that crypto would be protected from tariffs, that doesn’t seem to be the case, and the correlation is definitely back. However, while equities continue to grapple with the potential impacts of a trade war, folks over in crypto don’t have to deal with the same level of panic.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Several years in crypto warps the mind. Markets tanking. Worst week since covid. Biggest two day wipeout in history. Normie friends freaking out. And my brain doesn&#39;t register a single ounce of panic. &quot;Oh look, prices are down bad, eventually they&#39;ll go back up&quot; At this point…&mdash; Yano 🟪 (@JasonYanowitz) <a href="https://twitter.com/JasonYanowitz/status/1909287095425728571?ref_src=twsrc%5Etfw">April 7, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



I have a feeling we’re just going to continue assessing market conditions this week, but it hasn’t seemed to change the rather bullish stance folks in crypto have adopted despite the doomposting over on CT.



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Altcoin liquidity’s dropped since President Trump’s tariff announcement: Kaiko Research

Casey Wagner

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Surprise, surprise. Wall Street’s favorite fear index is spiking.&nbsp;



The Cboe Volatility Index was hovering around 48 Monday afternoon after spiking to 60 overnight. The index measures projected S&amp;P 500 volatility over the next 30 days.&nbsp;



The VIX’s 30-day moving average has been on the rise in recent weeks, coming in at 21.4 at the beginning of the month vs. its long-running average of 19.5.&nbsp;



We’re now almost four standard deviations above the long-term average, marking a level of volatility most recently seen in 2020 and 2008.&nbsp;



You’re going to see a lot of comparisons to 2020 and 2008 in the coming weeks. While the sizes of the selloffs may be similar, I’d argue the sentiment could not be more different.&nbsp;



The 2008 crash was characterized by broad mistrust in the financial system and uncertainty around how stability would be restored. Markets eventually recovered thanks to a massive stimulus package, financial bailouts and regulatory reform.&nbsp;



In 2020, the recession was caused by global lockdowns, resulting in supply chain disruptions, mass layoffs and slower growth. Relief came alongside another massive stimulus package and government policies to reopen the economy. 



The situation we’re in today is not the result of a collapsed financial system or a global pandemic. It would take a single tweet from the president (or a <a href="https://blockworks.co/news/tariff-stocks-fake-news-volatility-monday">misinformed X account</a>, as we saw today) to push stocks into the green. I’m still undecided on if that’s better or worse.



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VIX shows volatility will not be stopping anytime soon

Ben Strack

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It seems the market was acting up while I was out of office Thursday and Friday. It hasn’t stopped, either.



Several industry watchers called out BTC’s resilience at the end of last week (compared to US equities, for example) following Trump’s tariff reveal.&nbsp;



Then the asset’s price plummeted.&nbsp;&nbsp;



While BTC price stood around $83,000 Friday, Forward Guidance podcast guest Tony Greer called corporate bitcoin buying at every price level “astounding.” He also noted institutions’ ongoing willingness to buy the dip and their apparent long-term belief in the asset.



Though Strategy paused its BTC buying last week, the company bought 22,048 BTC at an average price of ~$87,000 per coin the week prior. GameStop recently closed a $1.3 billion private offering of convertible senior notes; a portion of the net proceeds may go toward <a href="https://x.com/gamestop/status/1904628096705454308">buying bitcoin</a>.&nbsp;&nbsp;



Net outflows from US spot bitcoin ETFs have stayed rather modest since peaking at $1.1 billion on Feb. 25. Roughly $165 million left those products last week, Farside Investors <a href="https://farside.co.uk/bitcoin-etf-flow-all-data/">data</a> shows.&nbsp;&nbsp;



Still, Forward Guidance’s Quinn Thompson noted: “It feels to me like if this broader risk meltdown drags too far too long, it’s eventually got to puke, I think.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Before BTC&#39;s weekend/Monday movement, we had the <a href="https://twitter.com/ForwardGuidance?ref_src=twsrc%5Etfw">@ForwardGuidance</a> crew weigh in on the asset&#39;s outlook. An update is coming soon in today&#39;s newsletter <a href="https://t.co/3RoxMCvM0n">https://t.co/3RoxMCvM0n</a> <a href="https://t.co/gw6cWB31L3">pic.twitter.com/gw6cWB31L3</a>&mdash; Ben Strack 🟪 (@strack_ben) <a href="https://twitter.com/strack_ben/status/1909295501435863454?ref_src=twsrc%5Etfw">April 7, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Let’s fast forward from that Friday conversation, as BTC’s price dropped substantially over the weekend — dipping below $75,000. It <a href="https://blockworks.co/news/tariff-stocks-fake-news-volatility-monday">whipsawed with equities</a> Monday morning and hovered around $78,500 at 1:30 pm ET. 



David Hernandez, a crypto investment specialist at 21Shares, noted that BTC not always capitulating in line with other risk assets highlights its divergence from traditional markets.&nbsp;



“Bitcoin’s behavior [over] the last several days reflects its <a href="https://blockworks.co/news/investors-bitcoin-narrative-confusion">developing investment thesis</a> as a store of value asset, one that could provide uncorrelated sources of return during moments of <a href="https://blockworks.co/news/tariff-markets-crypto-drop">macroeconomic uncertainty</a>,” Hernandez told me.



Now, markets eagerly search for any indication that Trump might pause or reverse tariffs ahead of Wednesday. Bitcoin cannot be tariffed, Hernandez added, “offering a potential flight to safety as other assets buckle.”&nbsp;&nbsp;



LMAX Group’s Joel Kruger argued that the current price levels present a compelling accumulation opportunity, regardless of the underlying fundamentals.&nbsp;



When evaluating where a “higher low” might emerge for equities and bitcoin, Kruger noted two “resistance-turned-support” levels: the S&amp;P’s 2022 high around 4,800, as well as the $74,000 mark for BTC.



“The weekend’s market turmoil has finally brought these critical zones into play,” he added. “We’re now looking at medium- and long-term levels that should strongly appeal to both US equity and bitcoin investors.”&nbsp;



Hernandez views $72,000 (the breakout start point following the election) as a key support level to watch. Looking ahead, he points to expected Fed rate cuts serving as a tailwind for risk assets — with sidelined capital possibly returning to equities, credit and crypto as borrowing costs fall.&nbsp;&nbsp;



The probability of a 25bps cut next month sat at 36% mid-day Monday, according to CME Group <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">data</a>.&nbsp;



Hernandez added that BTC could see moderate single-digit percentage bumps from the rate cuts that could help it get back to six figures later this year.



Longer term, he told me, a global trade war could spur countries fighting for currency dominance to gravitate toward BTC, given its neutrality and global liquidity.



There’ll be plenty more ebbs and flows before this story’s done.



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BTC resilience tested as volatility persists

Donovan Choy

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When Trump <a href="https://www.theguardian.com/news/audio/2024/dec/16/the-most-beautiful-word-in-the-dictionary-donald-trumps-tariff-plan-podcast">said</a> “tariff” was the most beautiful word in the dictionary, he neglected to mention that beauty is subjective.



Since Trump’s “reciprocal” tariff announcements on April 2, the S&amp;P 500 is down about 10.6%.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe2-eqhXrvQSBACtlhbn1ArxfIUl1xmVhdr3Zt2zVlM1iiXXFznYrAGS2AZdtCmODLcyBsU9LkmIsNN43vc91SPECNWm3qFuJMZsMUDZKqH5QMzlu9_-3m2LrAAP7ik42CGnOdVnw?key=zKcm9YxefUvR4GeXb1cGZJ4j" alt=""/></figure>



Even gold, typically considered to be uncorrelated with equities, took about a 6.4% dive on the tariff news.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdibXAU6R9N8o4_zyagj7KOqPHfGDUIKe5qSQgkqQ2bEreGHPNfbbN_AlV7Hyf3ai_RT_KDGaUv6hnKIRUtyl4k4OhcqLN5-k3lxvwL3gnx-6QKewf-oyd1ejYvpR29H3kxeRDJ7A?key=zKcm9YxefUvR4GeXb1cGZJ4j" alt=""/></figure>



Crypto markets held up over the weekend, much to everyone’s surprise.



Many <a href="https://x.com/hosseeb/status/1908572240754655738">theories</a> were offered for explanation.&nbsp;



Some suggested crypto assets showed resistance on anticipated rate cuts and quantitative easing; some said the equities selloff on Friday was simply institutional outflows; and Galaxy’s Alex Thorn posited that BTC was simply “<a href="https://x.com/intangiblecoins/status/1908500287565766920">tariff-proof</a>.”



Yet, after this brief flirtation with the idea that crypto assets would decouple from equity markets, it turned out to be pure hopium.



As the weekend drew to a close, bitcoin took a 6% nosedive on noon Sunday from $82.5k to its current trading levels of $77.2k. In the same time period, ETH took a harder tumble of 15.7%.



Down, but not a panic yet, according to CF Benchmarks’ head of product Thomas Erdösi. He notes that “CME basis remains firm above 6%, and the demand for downside protection, as seen in the 25-delta skew, underscores cautious sentiment without signaling panic.”



Total crypto market cap wiped thus far? About $0.23 trillion, or 8.6%.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfm2YvgqXK2xef45i-Yc4ylorYgnuqgMWAXmepNRAVBCGKLT-9wOnB9X80Gba67ba9XDALK16ySHiDi3u5HMklxi_w9q8KDr8K-CmmNTliyi5IgmKwhJz8rZYtN6Ry14d7Yu_MxaQ?key=zKcm9YxefUvR4GeXb1cGZJ4j" alt=""/></figure>



At bitcoin’s current price of $77k, that is about a steep 27.2% drawdown from January’s all time-highs of $106k, but still a relatively light drawdown compared to past years. The pink part of the Glassnode chart demonstrates yesterday’s drawdown relative to the last cycle.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfDLCuYEv3GLvw3tZgq8CQ_t_rFe-UgoehQHiPX50edx7W5nRqodJinxmevNxQWO5ozhXMbybiG7lCvt8qs04Lu3ZJ01TdhnRvjPQ3pA2yCmdN5M17KAhvm8kd3SquJ-XSPSO2QhA?key=zKcm9YxefUvR4GeXb1cGZJ4j" alt=""/></figure>



Based on <a href="https://www.coinglass.com/LiquidationData">CoinGlass data</a>, total estimated liquidations of crypto assets in the last 24 hours equaled to about $1.42 billion. BTC saw about $479 million while ETH saw $418 million in liquidations.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcwBqorTJ_cY7BqrBiRafK0NwIaGmlgJ8_YK8lt8pnrh0MHA0cvP-pDe1igLTiStvFAkQmGgqmsqoBjgCKcjYOzB3PWELO2pBkLUvv0OeQ3qSf-LXaANuD9FppqKhYlNlvgcPoPAw?key=zKcm9YxefUvR4GeXb1cGZJ4j" alt=""/></figure>



On the April 6 and 7, Aave v3 on Ethereum saw a total $91.85 million in liquidations and accumulated zero bad debt, based on <a href="https://aave.blockanalitica.com/v2/ethereum/liquidations/">Blockanalitica data</a>.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcA-9pqqAqeHBkyhSzVuoLkNeDXFWFWstAxdv5op_k-vbDIU-6ap0i__69vTtx1zIQ5He34VWhd1OihpNOoJI35iAajLK5I-36KxjfmwAx_vWA2dLyOULPTO3tE95_5EFRuU5fo?key=zKcm9YxefUvR4GeXb1cGZJ4j" alt=""/></figure>



It wouldn’t be crypto if you weren’t looking for opportunities in a downturn.



Based on the four-hour chart of CoinGlass’ relative strength index (RSI) heatmap, notable tokens in the $400-$500 million market cap range showing relative strength include the AI memecoin FART (RSI: 51), the DePIN token GRASS (RSI: 54) and the DeFi token PENDLE (RSI: 47).



All three tokens are trading within the neutral RSI band, outperforming a broader market skewed toward oversold conditions. This may suggest bullish upward momentum as these tokens diverge from downside pressure everywhere else.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfTB2oJft3-dqBLhfZ8hHXppzzEfulqGZax31KysZn6gpmROq8YIMXYz4Zk2jLpJf2SG8xatexR1rIW_6MPWvCeKPjtVnU3TXoM98YMc_XgzsnKOndn1W1kZR1BSVj77f0X64DNBg?key=zKcm9YxefUvR4GeXb1cGZJ4j" alt=""/></figure>



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Tariffs, tumbles, and tokens: A tale of market woe

US equities whipsawed Monday morning, with the S&amp;P 500 surging as much as 8% before falling 3.5% in a matter of seconds based on what the White House is calling “fake news” regarding upcoming tariffs.&nbsp;



Meanwhile, bitcoin traded sideways, hovering around $78,000 after falling below $80,000 Sunday evening. 



Investors appeared to be reacting to popular social media accounts that claimed the White House would be considering a three-month pause on implementing tariffs. The White House <a href="https://www.cnbc.com/2025/04/07/trump-tariffs-live-updates-stock-market-crypto.html">quickly told CNBC</a> the report was “fake news.”&nbsp;



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The rumor was apparently spurred by a comment from President Trump’s top economic advisor. When asked during a <a href="https://www.foxnews.com/video/6371175485112">Fox News interview</a> if Trump would consider a 90-day pause on tariffs, White House National Economic Council Director Kevin Hassett said, “I think the president is going to do what the president is going to do.” 



Trump on Monday <a href="https://truthsocial.com/@realDonaldTrump/posts/114297331052690348">threatened</a> a new 50% levy against China if the country does not back down from its retaliatory tariffs by Tuesday. Beijing last week said it would impose a 34% tariff on US imports starting April 10.&nbsp;



At the time of publication, the S&amp;P 500 was trading 0.6% lower while the Nasdaq Composite lost 0.1% on the session. The Dow Jones Industrial Average, after briefly moving into the green, was down 1,000 points. The VIX hovered around 45 after breaching 50 earlier in the day.&nbsp;



The chaos comes after Trump’s team spent the weekend assuring the world that tariffs will go into effect on time this Wednesday. Commerce Secretary Howard Lutnick on Sunday said that “there’s no postponing” the policies, adding that the higher levies will “stay in place for days and weeks.”&nbsp;



Markets are now calling for five interest rate cuts from the Federal Reserve this year. Odds of an interest rate cut in May jumped from 14% to 33% in one week, according to data from CME Group.&nbsp;



The Fed’s Board of Governors will hold its typical biweekly meeting Monday, an event also making the rounds on social media and being falsely characterized as an “emergency meeting.”



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