The lack of liquidity and the growing fear in the markets have shown their negative impacts on the risky markets. The investors are frightened by the tension in the politics and the tariffs may influence the dynamics of the markets thoroughly. Seeing that the uncertainty can stay for some more time, no more new positions have been added by both retail and institution investors in crypto and many other risky markets.
Nothing stays the same forever. The markets are eager to go up as the risk of inflation is no longer possible in the U.S. economy and the developing countries and the wars might be close to being permanently over.
The negative atmosphere in the markets is majorly related to the poor performance of the stocks in the NASDAQ 100 and S&P 500 indices. The fear that the tariffs may slow down the U.S. economy which may give birth to slower growth of the economy and less profit margins for the companies has been the major narrative investors follow.
The uptrend starting in 2023 is violated with the downward breakout in NDX.
Potentially, we may see the bloodbath going on until the levels are around 18.4K or even 16.7K. In the positive scenario, the violation of the channel can be temporary with a strong " god candle" which enters the price back to the uptrend. In such a case, expecting the prices around the previous ATH would not be surprising.
To be able to stay positive, we have to find another story to attract the new investors who would buy the assets from the current prices. For crypto, it is almost ATL for many coins whereas for the stock exchanges, we are still not there yet.
In an optimistic scenario, the certainty of the tariffs can be the first driving force that can terminate the downtrend in the risky markets. The reciprocal tariffs have been hitting the markets badly as it is almost impossible to foresee where this cold war would end.
Fear & Greed Index
We may have tasted the word days and the "fear" may be over.
A slightly bullish scenario in macroeconomics can trigger a stronger bull leg pretty soon. I am hopeful for the sentiment in April.
What do you think about the tariffs' impact on the markets?
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