"Bitcoin Plunges $4,500 in Hour Amid China Tariffs, Trump's Crypto Hype"
1min read Bitcoin's price experienced a significant drop on March 3, falling from $93,700 to $89,250 in less than an hour. This decline erased half of the gains made the previous day and likely triggered panic among traders. The sell-off occurred amidst China's announcement of retaliatory measures against the United States' additional 10% import tariffs, which also led to a 1% drop in S&P 500 index futures.
Despite the sell-off, Bitcoin's chances of reclaiming the $90,000 support level remain strong. On March 2, US President Donald Trump stated that Bitcoin and Ether (ETH) would be key components of the country's strategic digital asset reserves. He also hinted at further details being disclosed during the first government crypto summit on March 7.
The primary driver behind Bitcoin's price drop on March 3 was the excessive expectations fueled by Trump's weekend posts. Investors quickly realized the bureaucratic hurdles involved, including a lengthy approval process and the need for congressional approval. Additionally, doubts remain over whether the plan would involve actual purchases of these cryptocurrencies.
Aurelie Barthere, principal research analyst at blockchain analytics firm Nansen, correctly anticipated that Bitcoin's rally to $94,500 over the weekend was unsustainable. The 21% surge from the $78,300 low on Feb. 28 appeared exaggerated to some market participants, particularly given the ongoing global tariff war and broader macroeconomic uncertainty.
China's tariff retaliation could harm the US economy, with potential impacts including increased food and tech costs, disrupted supply chains, and reduced rural incomes. This could potentially shrink US GDP by 0.3% to 1.3%, according to economists. Hedge fund manager Anthony Scaramucci warned that if tensions escalate further, investors should brace for economic pain.
James “MetaLawMan” Murphy, a lawyer specializing in crypto legal and business issues, noted that even in the unlikely event that Congress swiftly approves the strategic digital asset reserve, the key question remains its funding source. Most likely, the initial approval would involve pausing government crypto asset sales—an action with limited impact on prices.
Another source of concern for Bitcoin traders came from Michael Saylor's March 2 announcement that Strategy (formerly MicroStrategy) 