Bitcoin Surges 2.5% to $80,000 on Tariff Pause Rumor, Retreats 2.5% on Denial

Bitcoin's price experienced a dramatic surge and subsequent retreat within a 24-hour period, driven by rumors and denials surrounding U.S. tariff policies. The cryptocurrency briefly climbed above the $80,000 mark following unconfirmed reports that the Trump administration might implement a 90-day pause on tariffs related to the ongoing trade dispute with China. This optimistic rumor sparked a rally across various risk assets, with Bitcoin leading the charge by breaking through the $80,000 resistance level.

However, the euphoria was short-lived. The White House swiftly dismissed the tariff pause rumor as "fake news," leading to a rapid reversal in market sentiment. President Trump further intensified the uncertainty by threatening to increase tariffs on Chinese goods to 50% if China did not roll back its retaliatory tariffs. This escalation in rhetoric sent Bitcoin tumbling back to around $78,000, erasing the gains made during the brief period of optimism.

The volatility in Bitcoin's price mirrored the broader market turmoil, which saw significant intraday swings. The Dow Jones Industrial Average, for instance, experienced a dramatic plunge of over 1,700 points before recovering to close with a more modest loss. This wild ride underscored the heightened sensitivity of global markets to geopolitical developments and policy announcements.

Technical analysis of Bitcoin's price movement revealed a clear failed breakout attempt above the $80,000 level. The Supertrend indicator remained bearish, signaling potential further declines. The On-Balance Volume (OBV) showed a slight uptick during the drop, suggesting some accumulation of Bitcoin at lower prices. Holding above the $78,000 support level became crucial for Bitcoin, as failure to do so could risk further drops toward $75,000 or even $72,000. For bulls, reclaiming the $80,000 level would be the first significant hurdle, with further resistance anticipated in the $83,500–$85,000 zone.

Adding to the day's intrigue, the Federal Reserve held an unusual closed-door meeting to discuss discount rates. This rare scheduling outside the regular Federal Open Market Committee (FOMC) calendar immediately sparked speculation about a potential emergency rate cut, reminiscent of the Fed's actions during the COVID crisis in March 2020. Such a move, if implemented, could inject liquidity into the market and potentially support a bullish trajectory for Bitcoin later in the year, counteracting the negative sentiment stemming from the tariff dispute.