As global markets reel from the United States’ sweeping reciprocal tariff announcements, analysts at Nansen have issued a note urging caution.
Their view: don’t fight the market tape. Instead, investors should wait for clarity on trade negotiations, labor market data, and the Federal Reserve’s next moves before repositioning.
The note, shared with crypto.news, comes after President Trump introduced aggressive new tariff rates — starting at a baseline of 10% and rising sharply for countries like China, Japan, and Vietnam.
Some effective rates may approach 50% once exemptions are factored in. Implementation begins as early as April 5.
Equity sell-off
Markets responded swiftly. U.S. small caps led a broad equity sell-off, crypto weakened, and the U.S. dollar declined against major currencies. The yield curve bull-flattened, signaling growing recession fears. Nansen believes markets are now pricing in a stagflationary scenario — stagnant growth combined with inflationary pressures.
“Now is probably the worst of the tariff uncertainty, at the same time,the negotiation is likely to linger: these are a lot of countries with often complex economic topics at stake,” Nansen Principal Research Analyst Aurelie Barthere wrote in the note.
While countries like Canada and Mexico appear to be spared from new tariffs — thanks to USMCA protections — major Asian exporters and parts of the Eurozone face steep trade barriers. Yet, few governments are signaling retaliation. Japan has opted for negotiations and fiscal support for exporters, while the Eurozone has opened dialogue on topics ranging from digital taxes to LNG imports.
On the domestic front, macro data paints a murky picture. ISM manufacturing and services data point to a borderline expansion, while a spike in the manufacturing price index raises inflation concerns.
ADP employment data showed modest strength, but layoffs in auto, retail, and tech sectors remain a red flag. Markets are currently pricing in 3–4 rate cuts by the end of 2025, but any deviation from that outlook could trigger further volatility.
Crypto’s impact
Crypto is not immune. Bitcoin (BTC) and Ethereum (ETH) charts show weakening momentum, with potential “death crosses” ahead. Solana (SOL) has already breached key weekly support levels. “This isn’t the moment to catch falling knives,” the report cautions.
In Nansen’s view, it’s time to stay on the sidelines until a more favorable macro and policy environment emerges.
“Don’t fight the tape,” the note emphasizes. “Patience is a virtue.”
