Bitcoin Nears 85,000 Amid U.S. Tariff Fears, Market Volatility

Bitcoin (BTC) was approaching 85,000 during European trading hours on Tuesday as traders anticipated the impact of U.S. tariffs scheduled for Wednesday. This movement came amidst a broader risk-off sentiment gripping global markets, with U.S. equities experiencing significant declines and investors flocking to safe-haven assets like gold.

The S&P 500 logged a 3% drop last week, marking its worst performance since September 2023. This risk-off mood extended to the cryptocurrency market, where overall market capitalization decreased by 3%, according to CoinGecko data. The broad-based CoinDesk 20 index also saw a 3% decline in the past 24 hours.

Despite the overall market decline, several major cryptocurrencies showed resilience. Dogecoin (DOGE) and Cardano (ADA) led the gains, rising over 7%. Ether (ETH), XRP, Solana’s SOL, and BNB Chain’s BNB also saw increases of nearly 5%.

Analysts attributed the muted gains to a lack of fresh catalysts and a market stuck in low-conviction mode. Augustine Fan, head of insights at SignalPlus, noted that there were no significant ETF inflows and that the market was closing out a rocky quarter with an 11% loss for bitcoin, the biggest for the S&P 500 since Q2 2022.

Speculative positions on bitcoin via the CME are at their most bearish in years, a sharp pivot from January’s bullish fever. Fan cautioned that positioning data is merely a statement on the market condition and not necessarily a signal to a tradeable setup. He also noted that the catalysts for a sustained rally remain fleeting at the moment, though any bullish turn could be sharp given the extended short positioning.

However, there are signs of resilience among long-term holders. Glassnode data shows that holders with 3-6 month positions are sitting on growing profits and trading at their lowest levels since June 2021, indicating conviction over panic selling. Newer whales, or large investors who’ve taken positions in recent months, are also holding firm rather than cashing out, lending stability to bitcoin’s price floor.

Jupiter Zheng, a partner at HashKey Capital’s Liquid Fund and Research, considered the tariff suspense and economic data dump as short-term headwinds. He expressed optimism in the long term, noting that more institutions are integrating crypto while regulators across the world initiate new policies to enhance adoption.