Bitcoin Drops 8.5% on Tariffs, Reaches $84,720 Amid Market Volatility

Tariffs imposed by the U.S. President have caused significant disruption in global markets, with the Federal Reserve also warning of potential economic implications. Federal Reserve Chairman Powell noted that these tariffs are adding inflationary pressure, thereby reducing growth and complicating the Fed's policy considerations. The combination of trade-related dynamics, central bank policies, and cryptocurrency trends has created an unusual intensity of focus on global financial markets.

The latest tariffs have increased economic uncertainty, with Federal Reserve Chair Jerome Powell warning of long-term risks for inflation and slow growth. Powell's remarks came as the stock market experienced a historic plunge, following escalating economic tensions between the United States and China. Powell noted that the reciprocal tariffs could derail the Fed’s 2 percent inflation target, complicating decisions about monetary policy as markets price in expectations for rate cuts and persistent price pressures.

Bitcoin, which has maintained significant attention even during traditional market swings, initially declined by 8.5% following the tariff announcement but later climbed to $84,720 as equities collapsed. This volatility highlights Bitcoin's independence from traditional asset correlations, according to analysts. Some analysts argue that tariffs could help Bitcoin rise by forcing central banks to inject liquidity. Strong Fed rate cuts and a weak dollar could potentially push Bitcoin to $250,000, drawing historical parallels with former quantitative easing cycles.

On April 4, Bitcoin prices started the day around $83,363 amid market uncertainty pending tariffs. The trading session began with Bitcoin consolidating at $83,102.83, awaiting further economic indicators and the Federal Reserve's response. The day saw a massive sell-off, followed by a recovery as investors sought safer assets amidst economic uncertainty.

Bitcoin's volatility is expected to continue as trade conflicts and monetary policy decisions unfold. Predictions suggest that Bitcoin could reach $126,089.43 in April 2025 due to increased investor interest and geopolitical instability. If market conditions worsen, Bitcoin could test support levels around $82,000 to $84,000. A breakout above $93,000 could lead to significant upside, potentially exceeding even the most optimistic forecasts. In the short term, Bitcoin is expected to fluctuate between $82,000 and $87,000 due to market sentiment and economic headlines.

The trajectory of Bitcoin's price remains dynamic, influenced by Trump tariffs and Fed policies. Analysts predict that Bitcoin could hit the $100,000 mark within the next few years, driven by increasing adoption and improvements in the macroeconomic environment. Powell’s inflation warnings have impacted traditional markets, with Bitcoin seen as an insurance against uncertainty under high volatility. If predictions hold, Bitcoin prices could reach $140,000 to $250,000 in the next five years, depending on central bank decisions and developments in trade wars.