Bitcoin Drops Below $80,000 as Trump Tariffs Spark Market Uncertainty

Bitcoin (BTC) experienced a significant downturn, dipping below $80,000, as the market reacted to the announcement of new tariffs imposed by US President Donald Trump on Canada. This development halted the cryptocurrency's recent price rebound, which had seen a 7% increase following the March 11 market open.

The tariffs, which were confirmed by Trump, introduced a new layer of uncertainty and risk aversion among investors. This sentiment was reflected in the broader financial markets, where the S&P 500 index also saw a decline of 0.5% on the day. The tariffs overshadowed positive economic data, such as the US JOLTS job openings report, which showed a slight overshoot of expectations.

Analysts noted that the tariffs have created a challenging environment for risk assets, including Bitcoin. Trading firm QCP Capital observed that Trump's apparent indifference to recession risks has made it harder for risk assets to recover. However, they also pointed out that the current market turmoil has led to a decrease in 10-year Treasury yields and a weakening of the US dollar, which historically has been a positive factor for USD-denominated risk assets like US equities and crypto.

The US dollar index (DXY) dropped to 103.32, marking its lowest level since mid-October 2024. This weakening of the dollar could potentially provide some support for Bitcoin and other risk assets in the coming days. However, the overall market sentiment remains cautious, with investors waiting for clearer signals before making significant moves.

Bitcoin price analysis indicated that the cryptocurrency is at a critical juncture. Trading channel More Crypto Online used Elliott Wave theory to identify key support and resistance levels, warning that price could still head to new long-term lows. They noted that a confirmed low would require a sustained break above the previous day's high in five waves, but the market's volatility makes it difficult to predict with certainty.

Popular trader CrypNuevo highlighted a "great reaction" at the 50-week simple moving average (SMA) around $75,500, which has remained unbroken since March 2023. This support level could provide a floor for Bitcoin's price in the near term, but the overall market uncertainty means that further declines are still possible.