Crypto markets are bracing for a potentially turbulent week as two major U.S. events converge, threatening to trigger significant volatility. Popular crypto analyst Crypto Rover has declared the new week "highly potent," warning of a major market shake-up stemming from former President Donald Trump's new tariffs on Europe and an imminent Supreme Court ruling on their legality.
The first event involves Trump's announcement over the weekend of a fresh 10% tariff on the European Union, marking the first major tariff escalation in nearly three months. The last similar shock on October 10 led to a $20 billion crypto market liquidation event and a sharp decline in the S&P 500. The EU tariffs threaten trade flows worth nearly $1.5 trillion, raising fears of European retaliation that could push the U.S. out of key trade routes, a bearish scenario for U.S. stocks.
The second critical event is the Supreme Court's expected ruling on Tuesday regarding the legal validity of Trump's tariffs. The Court has already delayed its decision twice. Markets currently perceive a strong chance the Court rules against Trump, creating two dangerous paths: a ruling against him could expose legal weaknesses and trigger a violent sell-off, while a ruling in favor would force markets to fully price in the damaging economic impact of the EU tariffs.
This combination of events creates a "ripe recipe for extreme volatility" as markets reopen. The crypto community remains on high alert, recalling that the October tariff shock coincided with crypto's biggest crash in five years.
Simultaneously, traders are monitoring a packed U.S. economic calendar that could further sway crypto sentiment. Key events include President Trump's address at the World Economic Forum in Davos on January 21, which could impact USD strength and global risk appetite. The Initial Jobless Claims report on January 22 is forecast at 203,000, with stronger-than-expected data potentially reinforcing hawkish Federal Reserve expectations and pressuring risk assets like crypto.
Also on January 22, the Core PCE Price Index—the Fed's preferred inflation gauge—is forecast to rise to 0.2% month-over-month. Hotter inflation could delay anticipated rate cuts, bolstering the USD and eroding crypto sentiment. The week concludes with the Revised University of Michigan Consumer Sentiment Index on January 23, expected to hold at a historically low level of 54.0, reflecting Main Street's economic despair which could dampen retail-driven crypto adoption.
As of the reporting period, Bitcoin was trading around $92,663, down nearly 3% in 24 hours as it defended the key $90,000 psychological level amid this geopolitical and macroeconomic uncertainty.
