Bitcoin Drops 6.5% as Trade Tensions Spark Market Panic

Bitcoin's price has experienced a significant decline, falling below $75,000 as global trade tensions escalate, causing widespread market panic. The cryptocurrency reached a low of $74,500 during early Asia hours on Monday, marking a 6.5% drop in the past 24 hours and over 5.8% for the week. Although it has since recovered slightly to hover near $77,179, analysts caution that further losses may be imminent.

The downturn in Bitcoin's price follows a tumultuous weekend triggered by President Donald Trump's announcement of sweeping new tariffs, set to take effect on April 9. The tariffs include a 10% baseline rate on all imports, with higher rates for certain countries, such as a 34% tariff on Chinese goods and a 20% tariff on products from the European Union. In response, China retaliated with 34% tariffs on all U.S. exports, leading to the worst single-day crash in China’s stock market since 2008.

Crypto trading firm QCP Capital noted that markets are reeling as the global trade war intensifies, with U.S. equities already under heavy pressure. While Bitcoin initially weathered the storm over the weekend, its resilience proved short-lived. With just two days until the implementation of higher tariffs, the global economy is on the brink of a full-scale economic war.

The fallout from the trade tensions has been severe across risk assets, with over $1.41 million in crypto positions liquidated in the past 24 hours, primarily affecting Bitcoin and Ethereum. Tracy Jin, COO of a crypto exchange, initially suggested that Bitcoin might be decoupling from the general market trend, appearing more stable than the S&P 500 and commodity assets. However, Jin cautioned that this stability was misleading, as most selling in the crypto market had already occurred from January to March, before equities began to slide.

Jin further noted that Bitcoin is now acting as a leading indicator of macroeconomic stress, with its price already reflecting the negative consequences of trade conflicts, particularly the U.S. tariff rhetoric towards China. Altan Tutar, CEO and co-founder of a global Bitcoin layer, added that Bitcoin's identity as an asset is being reshaped in real time. With market volatility rising and tariffs back on the table, 2025 will be a real test of whether Bitcoin behaves more like a tech stock or a safe-haven asset like gold. So far, elements of both are evident.

Tutar also highlighted that while Bitcoin operates in a digital layer and is less directly exposed to tariffs, cost pressures are still mounting. Rising hardware costs could make mining and validating more expensive, potentially evolving Bitcoin into a new kind of macro asset shaped by both financial markets and geopolitical stress. From a technical perspective, Jin warned that Bitcoin is at critical levels, with resistance above $80,000 being an important signal for institutional investors. A breakout below $71,000 could trigger a chain of liquidations with a target in the $65,000 area.

As the market awaits clarity from policymakers, Jin warned that a worsening political climate could also lead to increased oversight and measures to combat sanctions evasion, potentially limiting institutional adoption of cryptocurrencies. However, if Bitcoin continues to hold amid high turbulence, it may shift perceptions even among more conservative financial players, demonstrating its resilience in the face of global market volatility.