Bitcoin Drops 4% After Trump's Tariff Threats

Bitcoin (BTC) has experienced a decline in momentum this week, with markets remaining flat due to the extended Memorial Day weekend. Despite Strategy's recent acquisition of 4,020 BTC for $427 million, bringing its total holdings to over 580,000 BTC, the flagship cryptocurrency faced selling pressure as short-term holders encountered margin calls and liquidations. However, long-term holders capitalized on the situation by increasing their accumulation.

Robert Kiyosaki, author of "Rich Dad Poor Dad," has expressed his belief that Bitcoin represents an unprecedented opportunity to become wealthy, citing its limited supply and endorsements from prominent industry figures. Kiyosaki's comments came after Bitcoin surged to a new all-time high, hovering around $110,000. He predicted that Bitcoin could reach $250,000 by the end of the year, emphasizing that even small holdings of Bitcoin could become extremely valuable in the future.

On Monday, Bitcoin traded flat, ending the session where it began after some negligible intraday price action. The cryptocurrency briefly crossed the $110,000 mark but fell back by the afternoon, with trading volumes lower than usual. Analysts, including Aziz Zamani, believe that Bitcoin could still move towards $120,000, citing the bullish market structure and the key swing low at $91,500. Zamani noted that as long as $106,500 continues to hold, momentum remains with the bulls, and the current pause in the market appears to be a consolidation within an uptrend rather than a reversal or topping pattern.

Several macroeconomic factors could influence the market this week. President Trump announced a delay in the planned 50% tariff on imports from the EU, pushing the deadline from June 1 to July 9, which eased immediate fears of another trade war. Markets are also awaiting key data releases, including consumer confidence data, GDP reports, and GDP figures.

Bitcoin's surge to a new all-time high could be linked to ongoing issues in the Japanese bond market, indicating BTC’s growing reputation as a hedge against instability in traditional financial systems. Analysts attributed the surge to geopolitical developments and macroeconomic factors. According to Bitwise’s head of European research, Japan’s long-term bond yields have registered a substantial spike, with the 30-year yield on Japanese bonds reaching a new all-time high of 3.185% on May 20 before retreating to 3.115% on May 23. This increase in yields suggests investors are concerned about fiscal sustainability and repayment risk, making Bitcoin an attractive hedge against sovereign risk and sovereign default.

Bitcoin started the week on a mellow note as US markets remained closed for the extended Memorial Day weekend. Some analysts believe that besides the holiday, BTC’s rally to a new all-time high has triggered buyer fatigue. The rally dragged the daily Relative Strength Index (RSI) into the overbought zone, suggesting an imminent decline. Signs of waning momentum emerged as the RSI dropped below 70 after a 15% decline. Market intelligence firm Glassnode stated that this decline may signal cooling buyer enthusiasm, reduction in upward momentum, and a potential pause or reversal in the recent bullish trend.

Data from Glassnode also shows that while Bitcoin futures Open Interest reached an all-time high and funding rates increased, the perpetual CVD trended lower, suggesting stronger sell-side flows. Analysts believe BTC could break out to $150,000, with AlphaBTC stating that Bitcoin is still holding above the $106,000 level and that it is watching how BTC performs over the next couple of days. Ideally, it blasts up and shows strength to leave the breakout to be tested in the future.

BTC registered a marginal decline on Friday and Saturday to settle at $103,235. The price rebounded on Sunday, rising over 3% to cross $106,000 and settle at $106,489. BTC plunged to an intraday low of $102,135 on Monday as selling pressure intensified. However, it rebounded from this level to reclaim $105,000 and settle at $105,572, ultimately registering a decline of almost 1%. BTC recovered on Tuesday, rising 1.21% to reclaim $106,000 and settle at $106,854. Bullish sentiment intensified on Wednesday as BTC rose 2.57% to cross $109,000 and settle at $109,603.

BTC raced to a new all-time high on Thursday, surging to $111,970 before registering a marginal decline and settling at $111,582. Price action turned bearish on Friday thanks to President Trump’s renewed tariff threats. As a result, BTC fell nearly 4% to $107,356. The drop also occurred after the flagship cryptocurrency encountered a wall of resistance around $112,000. BTC recovered over the weekend, rising 0.46% on Saturday and 1.15% on Sunday to settle at $109,095. Price action was muted on Monday as BTC registered a marginal increase, briefly rising above $110,000 before settling at $109,453. The current session sees BTC marginally up, recovering from a low of $107,577, trading around $109,635.