Bitcoin News Today: Bitcoin Dips 5.3% as Tariff Fears Trigger $900M Liquidations and Bear Trap Builds

Bitcoin’s recent sharp decline has sparked a wave of panic across the crypto and broader financial markets, yet seasoned traders see a different narrative emerging beneath the chaos. Over the past 24 hours, Bitcoin plunged more than $5,000, triggering over $900 million in liquidations, with long positions—particularly in Ethereum—bearing the brunt of the selloff [1]. The drop was exacerbated by political uncertainty following new tariff announcements by Donald Trump, which sent shockwaves through both crypto and traditional equity markets [1].

While the S&P 500 dropped 1.5%, the NASDAQ fell by 2.16%, and the Dow closed down 1.2%, the crypto market mirrored the turmoil. Retail traders, reacting to the sharp declines and breaking key support levels, executed stop-loss orders and exited positions en masse. However, institutional players and experienced traders have positioned this downturn not as a bearish breakdown but as a classic setup for a potential breakout [3].

The strategy appears to follow a familiar playbook: triggering panic-driven liquidity to absorb discounted assets before a reversal. This was evident in Ethereum, which briefly dipped below $2,000, shaking out weak hands and opening the door for smart money to accumulate. A similar pattern was observed in XRP, where a sharp drop below $3 coincided with heavy selling, yet signs suggest that larger players had already begun repositioning or exiting their stakes [4].

The bear trap narrative has also extended into altcoins like Dogecoin, where an 8% drop to $0.21 was accompanied by a significant accumulation of 310 million tokens, hinting at institutional buying [9]. Technical signals such as bearish engulfing patterns and tight-range dojis have reinforced the idea that smart money is actively shaping the market through controlled volatility [8].

Despite the short-term pain, many in the know argue that Bitcoin has historically lagged before surging forward with greater momentum. The current pullback may be part of a larger positioning move, where liquidity leads and volume builds ahead of a potential breakout. Traders with a long-term view remain cautiously optimistic, emphasizing the importance of trend-riding and pullback additions rather than chasing breakouts [5].

The unfolding scenario highlights the growing sophistication of institutional players in managing market sentiment and liquidity. While retail investors are often caught in the crossfire of these orchestrated moves, the broader trend suggests that those who stay the course may yet benefit from the eventual rebound.

Source:

[1] Cryptonewsland (https://cryptonewsland.com/smart-moneys-already-in-bear-trap-or-breakout/)

[3] Merlijn The Trader (@MerlijnTrader) / X (https://x.com/merlijntrader?lang=en)

[4] The (https://thetradable.com/crypto/xrp-price-crashes-below-3-as-bulls-get-squeezed-is-the-rally-dead-1--a)

[5] TradingView (https://www.tradingview.com/symbols/ETHUSDT/ideas/?exchange=COINW)

[8] TradingView (https://www.tradingview.com/ideas/)

[9] The (https://thetradable.com/crypto/dogecoin-doge-price-drops-8-while-big-players-quietly-buy-the-dip-3--v)