The answer is at the front:
Today marks the first phase of the tariff reaction. Whether it will continue to decline depends on whether there will be an escalation of tariffs or retaliatory measures between Europe and the U.S. from tonight to tomorrow, as well as whether the Supreme Court can respond quickly. If there are no further stimulating news, a consolidation and recovery is possible; however, if Trump continues to stimulate the market, the probability of a continued decline tomorrow will not be low.
Main text:
This should be the most concerning issue for most friends. First, we need to clarify the reasons for the decline. This time, the decline of $BTC has two reasons, the biggest of which is Trump's tariffs on Greenland-related countries. The tariffs imposed by the United States triggered retaliatory measures in Europe, and the U.S. intends to continue its retaliation on top of Europe’s response. The last time these 'emotional disputes' occurred was during the tariff war between the U.S. and China in April.
If this really happens, then the situation may be more serious than initially with China, because compared to China, U.S. imports from Europe are more important, and Europe's export structure to the U.S. is closer to the consumer end, from automotive parts, luxury goods, pharmaceuticals to high-end manufacturing. Any sector subjected to tariffs will directly reflect on U.S. inflation expectations.
PS: According to U.S. Census data, as of October 2025, the U.S. imported approximately $266.3 billion in goods from China and approximately $537.9 billion from the EU, with EU imports exceeding those from China by more than double.
More critically, Europe does not only hold the card of equal tariffs; the countermeasures being discussed by Europe even include stronger 'toolbox or counter-coercion measures', which will push things from trade friction into the realm of geopolitics, causing the market's risk appetite to sharply contract.
The second reason is that the CLARITY Act, which cryptocurrency enthusiasts have been looking forward to, has been suspended under the leadership of the Coinbase CEO. The core controversy is that the draft tends to prohibit earning income solely from holding stablecoin balances, which will suppress the growth space and commercialization path of stablecoins like USDC within the U.S. system. The market originally expected the bill to land quickly, ending regulatory uncertainty, but it turned into 'key node delay + internal industry division', resulting in investors shedding valuation premiums and withdrawing expected beneficial leverage.
My conclusion is:
First, has the tariff news continued to escalate? Is there an expansion of the subjects, or is the pace of raising the 10% tariff to 25% being advanced? Is there any statement like 'French wine 200%' that further stimulates volatility? Once escalated, the probability of continuing to drop tomorrow will be high.
Second, the reaction from Europe is to avoid escalation or to counter immediately. Currently, there are indeed voices within Europe trying to avoid escalation. The market is also worried whether Europe will restart or introduce a counter-tariff list for goods worth 93 billion euros. Of course, if Europe does not intervene in Greenland's issues, the tariffs may end immediately, and the probability of market rebound will be very high.
Third, the attitude and pace of the U.S. Supreme Court. The reason this round of tariffs is seen as a geopolitical risk by the market is essentially that its legality and boundaries are not clear, especially after Trump repeatedly used tariffs as a diplomatic weapon. Whether the court will impose clearer restrictions on the president's tariff powers will directly affect market expectations regarding this matter.
If the Supreme Court can quickly release signals that tariffs are illegal, the market will quickly adjust and rebound. However, if the Supreme Court remains silent, or recognizes Trump's IEEPA tariffs, the market will likely default to the notion that tariffs can be long-term and normalized, which will have a greater impact on the risk market.
Trading strategy:
Even at the trading level, the 'Supreme Court' can be seen as a switch for either positive or negative sentiment. If any clear procedural nodes appear recently (whether it accepts the case, accelerates the hearing, or releases restrictive wording), even without a final ruling, it will marginally improve risk appetite. Conversely, if silence continues, or if the White House maintains a tougher stance, the market will tend to continue deleveraging and lowering risk appetite.
My personal view is that we need to continue to closely monitor news and attitudes regarding tariffs from Europe and the U.S. Once escalation continues, the market decline may not be over. However, if either party shows signs of softening, or if the U.S. Supreme Court has a clear statement, the market rebound may come faster. As for the CLARITY Act, the help it can provide is currently very limited. If there is no escalation of conflict, the likelihood of the market maintaining a sideways trend is still quite high.
PS2: Yes, you read that right, the conclusion is either up or down, or it may be sideways. You might scoff at this, but if you can understand it a bit, I believe you won't think that way anymore. There is no certainty in this world; I tell you that saying tomorrow will definitely rise or definitely fall is the most irresponsible. What I do is outline the factors influencing the market, which you can relate to.
PS3: Can you let the AI write a look?
Additionally, this also tells us again about the correlation between Bitcoin and U.S. stocks. Movements in U.S. stocks will basically be reflected in $BTC. Moreover, Bitcoin is essentially an amplifier of U.S. stock sentiment.
