Financial markets have remained under pressure as escalating trade tensions and economic uncertainty fuel volatility. 

The latest round of tariffs imposed by the Trump administration—25% on steel and aluminum imports—has drawn a sharp response from the European Union, which is set to implement retaliatory measures worth €26 billion ($22 billion). While some of these tariffs will be enacted on April 1, full implementation is scheduled for April 13.

The market’s nervousness is reflected in the volatility index (VIX), which spiked to 28 before settling at 26.6. 

Analysts at QCP Capital noted that the Cboe Exchange’s VIX term structure is now in backwardation, historically a signal of potential market stabilization. Similar patterns in the past have preceded rebounds in the S&P 500, offering hope that the current downturn could be temporary.

CPI Release Looms Amid Rate Cut Expectations

Investors are now turning their attention to the upcoming Consumer Price Index (CPI) release, which is expected to influence market sentiment significantly. 

The latest non-farm payroll (NFP) report fell short of expectations, prompting markets to price in four interest rate cuts for the year—up from just one in January. However, lingering inflation concerns, especially after January’s CPI surprise, have left investors cautious. 

The upcoming inflation report will be crucial in determining whether disinflation remains on track or if macroeconomic risks will escalate further.

Crypto Market Uncertainty Grows Amid ETF Delays

The cryptocurrency market is also facing regulatory uncertainty. The US Securities and Exchange Commission (SEC) has postponed ETF approval decisions for major digital assets—including XRP, Solana (SOL), Litecoin (LTC), Cardano (ADA), and Dogecoin (DOGE)—until May 2025. The delay underscores the agency’s cautious approach as it seeks further evaluation before granting regulatory approval.

In a bid to address broader concerns over crypto regulation, the SEC has announced a series of roundtable discussions. The first event, titled “How We Got Here and How We Get Out – Defining Security Status,” will be held on March 21 at the SEC’s headquarters in Washington, DC Led by Commissioner Hester Peirce, the discussion will focus on the classification of crypto assets and the regulatory frameworks necessary for industry growth.

Despite these efforts, the delay in ETF approvals may not be enough to shake up the crypto market in the short term. Bitcoin continues to trade within a range, finding support around the $82,000 level. However, Bitcoin ETFs have recorded significant outflows, with Grayscale’s Bitcoin Trust (GBTC) leading the trend. GBTC recently sold 641 BTC worth $56.45 million, reducing its total holdings to 195,746 BTC, valued at approximately $17.24 billion. This suggests growing institutional caution toward the market.

Bitcoin Price Struggles, Fear and Greed Index in Extreme Fear

According to CoinMarketCap, Bitcoin is currently priced at $82,183.38, marking a modest 0.60% gain in 24 hours. However, the cryptocurrency has suffered an 8.82% decline over the past seven days. The Fear and Greed Index, a key market sentiment indicator, has dropped to 19, signaling “extreme fear” among investors.

Despite the ongoing downturn, crypto market veteran Arthur Hayes remains optimistic. In a recent tweet, Hayes urged investors to be patient, predicting that Bitcoin could bottom out around $70,000—a 36% correction from its all-time high of $110,000. 

Hayes anticipates a further downturn in traditional markets, including the S&P 500 and Nasdaq, before central banks like the Federal Reserve, the European Central Bank (ECB), and the People’s Bank of China (PBOC) step in with monetary easing measures.

“Traders will try to buy the dip, but if you are more risk-averse, wait for central banks to ease before deploying more capital,” Hayes advised. “You might not catch the bottom, but you also won’t have to suffer through a long period of sideways and potential unrealized losses.”

As global markets navigate economic uncertainty, investors will closely watch upcoming macroeconomic data and regulatory developments to gauge the next move for equities and crypto assets alike.