Bitcoin Drops 8% to $75,000 as U.S. Tariffs on China Take Effect

Bitcoin is currently experiencing downward pressure due to escalating global economic tensions following the U.S. government’s confirmation of 104% tariffs on China. This geopolitical event has significantly impacted the cryptocurrency market, leading to a sharp dip in Bitcoin’s price. On April 8, Bitcoin reached an unexpected high of $81,180 due to misleading reports regarding U.S. tariff policies. However, this rebound was short-lived as the reality of the tariffs set in, causing a reevaluation of BTC’s trading patterns.

On April 9, as the tariffs officially took effect, Bitcoin prices fell below the critical threshold of $75,000 for the first time since November 2024. Analysts are closely monitoring the fair value gap, which ranges from $77,000 to $73,400, a region of past bullish activity that many believe could serve as a refuge for buyers in a volatile market. This price zone is pivotal; historical data suggests that BTC could find support here during downward trends. Michael van de Poppe, a prominent analyst, stated, “We need to retest this zone before going back upward,” underscoring the significance of these levels in the broader market outlook.

Supporting this sentiment, fellow analyst Jelle noted Bitcoin’s resilience when it closed above $79,000 after a preliminary drop to $74,400. “This performance was impressive relative to stock market behavior,” he remarked, suggesting that once the market stabilizes, BTC could be poised for recovery. Despite recent fluctuations, traders remain cautiously optimistic, identifying critical support levels that may indicate potential price recovery.

Digging deeper into Bitcoin’s price dynamics, data from the on-chain analytics platform CryptoQuant reveals a concerning trend among long-term holders (LTHs)—those who have held their Bitcoin for over 155 days—who appear poised to sell following the recent downturn. The Exchange Inflow Coin Days Destroyed (CDD) metric indicates that a significant number of dormant coins are now being moved to exchanges, a sign that could precede increased selling pressure. A sharp spike in this metric was recorded on April 7, acting as a leading indicator for historical price declines. For instance, following a similar spike on April 2, the price of Bitcoin fell from $88,000 to $81,000, suggesting that the latest surge in inflow activity could coincide with further price slippage. With the current analytics implying potential sell-offs, traders must monitor the activity of long-term holders closely.

As market dynamics continue to evolve, it is crucial to assess the implications of long-term holder behavior on Bitcoin’s price trajectory. With a significant proportion of LTHs potentially set to sell, the landscape may shift dramatically in the coming days. If historical patterns hold true, Bitcoin could face sustained pressure, heading toward the lower boundary near $74,000, which stands as a critical support level established during previous market rallies. Analyst Michael van de Poppe emphasized the importance of Bitcoin retesting key demand zones, noting, “Bitcoin attacking $80,000 is a strong sign.”

In summary, Bitcoin’s current landscape is shaped by external economic pressures and internal market dynamics. The government’s tariff announcement has exacerbated price volatility, while the responses of long-term holders could dictate the next movements in BTC’s price. As analysts continue to monitor critical support zones, the potential for a rebound remains contingent on how quickly the market can absorb recent shocks and restore bullish sentiment. Understanding these interconnected factors is vital for traders aiming to navigate this complex crypto environment.