Bitcoin News Today: Bitcoin's Tariff-Driven Plunge Tests Its Role as a Risk-Off Haven

Bitcoin's price has experienced significant volatility amid escalating trade tensions fueled by U.S. President Donald Trump's recent tariff announcements. On October 10, 2025, Trump declared a 100% tariff on Chinese imports effective November 1, a move that triggered a sharp sell-off in cryptocurrency markets. Bitcoin (BTC) plummeted below $110,000 within hours, erasing $125 billion in market value and liquidating over $824 million in leveraged positions, according to CoinGlass data . The broader crypto market capitalization fell to $4.02 trillion, reflecting a "risk-off" shift as investors recalibrated positions .

The tariff shock follows a recent rally that pushed Bitcoin to an all-time high of $126,822 earlier in October, driven by sustained ETF inflows and institutional demand Forbes Digital Assets^[6]. However, the renewed geopolitical uncertainty has tested the market's resilience. Analysts attribute the decline to a combination of profit-taking after the recent surge, dollar strength, and the broader market's sensitivity to trade policy shifts Forbes Digital Assets^[6]. "Bitcoin's recent pullback below $120,000 reflects a mix of short-term profit-taking after its record surge, risk-off sentiment across broader markets, and renewed dollar strength weighing on crypto as a hedge," said Joe DiPasquale, CEO of BitBull Capital Forbes Digital Assets^[6].

Trump's tariff agenda, which includes retaliatory measures against China's rare earth export controls and potential reciprocal tariffs on global partners, has created a volatile macroeconomic environment. The administration's "Liberation Day" plan, announced for April 2, 2025, initially triggered a similar market selloff, with Bitcoin dropping to $82,000 before partial recovery Cointelegraph^[4]. This time, the impact was amplified by overlapping factors, including the U.S. government shutdown and ongoing Federal Reserve rate-cut speculation. "The back-and-forth on tariffs has left markets in limbo," noted Justin d'Anethan of Liquifi, highlighting the uncertainty Cointelegraph^[4].

Institutional investors remain divided on Bitcoin's near-term trajectory. While some view the dip as a buying opportunity, others warn of prolonged turbulence. Cory Klippsten, CEO of Swan Bitcoin, cautioned that "macro-driven dips like this usually wash out leveraged traders and weak hands, then reset positioning for the next leg up," though volatility may persist . Conversely, Bitfinex analysts noted that the current price action mirrors the 2020 stimulus check-driven rally, suggesting a potential rebound if institutional flows resume Forbes Digital Assets^[1].

The market's reaction underscores Bitcoin's growing correlation with traditional assets. Following Trump's tariff announcement, the S&P 500 and Nasdaq fell by 4.8% and 6%, respectively, while gold rose to $4,000 per ounce as investors sought safe havens CoinDesk^[2]. "With BTC's correlation to the S&P 500 and other traditional assets, it wouldn't be silly to discount tariffs and geopolitical maneuvering," said Ryan Lee of Bitget Research AnalyticsInsight^[5].

Long-term implications remain uncertain. If trade tensions persist, Bitcoin could face further downward pressure, testing support levels as low as $71,000, according to some analysts AnalyticsInsight^[5]. However, others argue that Bitcoin's role as a hedge against economic instability could drive a rebound, particularly if institutional adoption accelerates. "Bitcoin is potentially forming a bullish divergence," noted pseudonymous analyst Rekt Capital, though the asset must hold key support levels to validate the trend CCN^[3].

Regulatory developments, such as the U.S. House's passage of the STABLE Act, add another layer of complexity. While the bill aims to regulate stablecoins, its political ties have sparked debate, influencing market sentiment AnalyticsInsight^[5]. Meanwhile, on-chain metrics like the Bitcoin P/L ratio, which fell below 1.0 after Trump's tariff announcement, indicate exhausted selling pressure but also highlight the fragility of the current rally CCN^[3].

As the market digests the latest developments, analysts urge caution. "The coming days will be critical," said Zach Burks of Mintology, noting that Bitcoin's ability to decouple from traditional markets will determine its long-term trajectory . With Trump's tariff agenda still evolving and global trade tensions unresolved, Bitcoin's path remains contingent on macroeconomic clarity and institutional confidence.