Bitcoin Drops 7% to 4-Month Low on Trump Tariff Announcement

Bitcoin's price has recently experienced a significant downturn, falling to a four-month low of $74,409 in response to President Donald Trump's announcement of new global tariffs. This drop was part of a broader market reaction to the tariff plans, which included reciprocal tariffs on several major economies. The tariffs were larger than anticipated, leading to a massive sell-off in global risk assets, including Bitcoin.

The cryptocurrency market, often viewed as speculative and risk-driven, followed the broader market trend downward. Bitcoin's price dropped alongside stocks and other risk assets, reflecting the market's reaction to the tariff announcements. The President's stance on tariffs, including threats of steeper duties on China, further exacerbated the market's uncertainty and volatility.

Bitcoin's recovery began shortly after the initial drop, with the price rebounding to around $79,673 and briefly crossing the $80,000 mark. However, technical indicators suggest that the recovery may face obstacles. Bitcoin is currently trading below $81,200 and the 100-hour Simple Moving Average, with a bearish trend line forming resistance at $80,400. This trend line could limit Bitcoin's upward movement in the short term.

Additionally, a "death cross" technical pattern has formed, which occurs when a short-term moving average falls below longer-term moving averages. In Bitcoin's case, its 50-day moving average dropped below its 200-day moving average, signaling potential near-term weakness. Technical analysts note that Bitcoin is testing a critical threshold—the 50-week exponential moving average (50-week EMA), currently near $77,500. This average has historically served as a dividing line between bull and bear phases.

For those tracking Bitcoin's price movement, several key levels have emerged. On the upside, immediate resistance is near $80,400, with the first major resistance level sitting at $81,500. If Bitcoin can break above $82,500, the price could rise further to test the $83,500 level, with additional gains potentially pushing the price toward $85,000. On the downside, immediate support is near $79,500, with the first major support level around $78,000. If these levels fail to hold, further support can be found at $76,500, with additional losses potentially sending the price toward $75,000 or even the recent low at $74,409.

Technical indicators show the hourly MACD gaining pace in the bullish zone, with the hourly RSI for BTC/USD now above the 50 level, suggesting some positive momentum. However, short-term holders have an average cost basis of about $89,000, with the lower band of this range sitting at $69,000, which analysts consider a potential "max pain" zone where short-term investors might capitulate during pullbacks. Approximately 175,000 BTC are held in the $74,000-$70,000 range, with the largest cluster at $71,600 holding 41,000 BTC. This could provide a buffer if the price falls further.

With tariffs set to take effect and uncertainty remaining high, Bitcoin traders will be watching key technical levels closely in the coming days. The broader cryptocurrency market has followed Bitcoin's recovery pattern, with Ethereum, XRP, Solana, Cardano, and Polygon all experiencing gains. However, the market's reaction to the tariffs and the potential for further volatility remain key factors to watch in the coming days.