Bitcoin Drops 1% as Trump Announces 25% Tariffs on South Korea Japan

On Monday, the cryptocurrency market experienced a bearish trend, erasing some of the gains recorded over the weekend. Bitcoin initially slipped to the $107,500 region but has since recovered and is currently trading above $108,000. Institutional demand continues to be the primary driver for Bitcoin, which could empower it to rally higher over the coming days and weeks.

At the start of the new week, tariff talks resumed with significant announcements. President Trump declared that the United States would impose a 25% tariff against South Korea and Japan starting August 1. Additionally, a 25% levy was set against Kazakhstan and Malaysia, a 30% levy against South Africa, and a 40% levy for Myanmar and Laos. Trump also threatened additional tariffs on countries aligning with the policies of the BRICS nations. These announcements briefly caused Bitcoin to drop below $108,000, but the leading cryptocurrency quickly bounced back and showed signs of a potential rally.

Bitcoin's resilience can be attributed to increasing institutional demand. On Monday, Japanese firm Metaplanet added over 2,000 bitcoins to its balance sheet for $239 million. Furthermore, recent data revealed that US-listed spot Bitcoin Exchange Traded Funds (ETFs) recorded over $769 million in inflows last week. These figures suggest that institutional investors continue to demand Bitcoin, which could be a catalyst for a price surge in the medium to long term.

The BTC/USD 4-hour chart remains bullish as buyers maintain control. The pair is also efficient, suggesting that liquidity on the downside has been swept and Bitcoin could be preparing for another leg up. At press time, Bitcoin is trading at $108,040, down by less than 1% in the last 24 hours. The Relative Strength Index (RSI) of 52 indicates that Bitcoin could experience buying pressure soon, while the MACD lines are still within the positive territory. BTC seems to be currently consolidating tightly around $110,000, just beneath overhead resistance.

A decisive move above the all-time high price of $111,000 in the short term could see Bitcoin target $120,000, setting a new all-time high in the process. Analysts still expect Bitcoin to touch $150,000 in this cycle, and this could be possible if BTC breaks out and hits $120,000. However, failure to break out from this consolidation area could see Bitcoin retest the support and Transactional Liquidity (TLQ) level at $105,328. This level could serve as a springboard for Bitcoin to rally higher. If the bulls fail to take advantage of this, BTC could drop to the next major support level at $98,000.

Bitcoin’s short-term performance depends on institutional demand for the cryptocurrency. Furthermore, the renewed tariff talks could play a significant role in how the broader crypto market performs over the next few weeks. The market's reaction to these tariffs and the continued institutional interest in Bitcoin will be crucial factors in determining its future trajectory.