Analysts at Coindesk pointed out that Wall Street's famous "fear gauge", the Volatility Index (VIX), surged to 39 after the escalation of Sino-US trade tensions, the highest level since October 2020. Traders have raised their expectations for the Federal Reserve to cut interest rates this year due to China's retaliatory tariffs on US goods. The CME FedWatch tool shows that the market expects interest rate cuts this year to 116 basis points from the previous 100 basis points. Deribit platform DVOL index shows that bitcoin's 30-day implied volatility rose to 54.6%, a two-week high.