Bitcoin Drops 7% After White House Confirms 104% China Tariffs

Bitcoin's recent rally, which saw it surge to $81,180, has lost momentum following the White House's confirmation that 104% tariffs on China will be implemented starting April 9 at 12:01 am. This news has led to a significant drop in Bitcoin's value, falling below the $75,000 mark for the first time since November 6, 2024. The rally was initially fueled by false information suggesting a pause on US tariffs, which has since been debunked.

Bitcoin's decline has retested a key demand zone between $77,000 and $73,400, a fair value gap created during the November 2024 Trump pump. This zone is seen as a potential safe haven for bulls, as it provides a support level for the cryptocurrency's price. Michael van de Poppe, founder of MN Capital, had previously stated that Bitcoin needed to retest this zone before resuming its upward trajectory. He also noted that Bitcoin's ability to attack the $80,000 level is a strong sign, but he remains uncertain about whether the cryptocurrency will experience another drop or if the recent decline was the final one.

Another analyst, Jelle, shared similar sentiments, highlighting that Bitcoin's close above $79,000 on April 7, after dropping as low as $74,400, was impressive compared to the performance of equities. Jelle expects the price to move higher once the market stabilizes. However, the long-term holders' activity on the blockchain suggests that a sell-off could be imminent. Data from onchain analytics platform CryptoQuant shows that long-term holders, who have held Bitcoin for more than 155 days, may be preparing to sell their coins following the latest crash.

The Exchange Inflow Coin Days Destroyed (CDD) metric, which measures the volume of Bitcoin moved to exchanges weighted by how long those coins were held dormant, spiked on April 7. This spike indicates potential selling pressure from long-term holders and is historically a bearish sign. Previous spikes in this metric have preceded significant price drops, suggesting that Bitcoin's sell-off could continue for a few more days. The March 2024 all-time high near $74,000 presents the first line of defense for the cryptocurrency's price.

According to the analyst's forecast, if history repeats itself, Bitcoin's sell-off could continue for a few more days, with the March 2024 all-time high near $74,000 presenting the first line of defense. This analysis is based on the historical performance of the Exchange Inflow CDD metric and its correlation with Bitcoin's price movements. However, it is important to note that every investment and trading move involves risk, and readers should conduct their own research when making a decision.