Bitcoin Drops 5% As Tariffs Trigger Crypto Sell-Off

Bitcoin (BTC), the leading cryptocurrency by market capitalization, is currently trading around $81,500, having fallen about 5% in the past 24 hours. This decline has brought the cryptocurrency close to a technical pattern known as the 'death cross,' which is often seen as a bearish signal. The 'death cross' occurs when the 50-day moving average of a cryptocurrency's price falls below its 200-day moving average, indicating a potential downward trend.

Bitcoin isn’t the only crypto caught in a downtrend right now. Other cryptocurrencies are also falling on news that Trump has imposed a baseline 10% tariff on all imports into the U.S. Ethereum (ETH) is down 7% and Solana (SOL) has fallen 12% on April 3. Dogecoin (DOGE) is down about 10%.

Crypto prices peaked on Jan. 20, the date of Trump’s inauguration, and have steadily fallen since then. Bitcoin is down 13% on the year and has declined about 25% from an all-time high of just over $109,000 reached in January. The stakes this time around seem particularly high for Bitcoin given the escalating global trade tensions and prospect for an economic recession in the U.S.

Market analysts are closely monitoring this development, as the 'death cross' could signal further declines in Bitcoin's price. The cryptocurrency has been struggling to maintain its value, with weeks of weakness that saw it fail to breach certain resistance levels. Despite a recent rebound to above $84,000, the potential for a 'death cross' has raised concerns among investors and traders.

The tariff announcement, which triggered $500 million in crypto liquidations, has added to the uncertainty in the market. Retail traders are divided on what the next steps should be, with some advocating for reducing exposure to Bitcoin while others remain optimistic about its long-term prospects. The mining power of Bitcoin has surged, which could provide some support to its price, but the overall sentiment remains cautious.

The 'death cross' is not the only technical development that market analysts are watching. Other major technical indicators, such as the Bitcoin Fear & Greed Index, are also being closely monitored. The index has shifted as Bitcoin rallied to $85,000, but the potential for a 'death cross' has kept investors on edge. Analysts are waiting to see if the 'death cross' materializes and how the market will react to this bearish signal.

Most Wall Street firms don’t offer ratings or price targets on Bitcoin, so we’ll look at the cryptocurrency’s three-month performance instead. As one can see in the chart below, the price of BTC has declined 16.07% in the last 12 weeks. Bitcoin, the world's largest cryptocurrency by market value, experienced a significant drop from $88,000 to as low as $82,500 following a recent tariff announcement. This decline has brought the cryptocurrency close to a technical pattern known as the 'death cross,' which is often seen as a bearish signal. The 'death cross' occurs when the 50-day moving average of a cryptocurrency's price falls below its 200-day moving average, indicating a potential downward trend.