Bitcoin Tests Critical Support as Tariffs Spark Market Turmoil

Bitcoin (BTC) price has been testing a critical support level at $90,000 following three months of consolidation. The leading cryptocurrency dropped below $91,000 on February 25, 2025, reaching its lowest level since November 2024. This decline was part of a broader market downturn that saw the total cryptocurrency market cap shrink by 8% from $3.31 trillion to approximately $3.09 trillion.

The sell-off triggered nearly $1 billion in liquidations across the crypto market, with long Bitcoin positions accounting for over $277 million of that total. The market has been trading in a tight range between $91,000 and $102,000 for almost 90 days, indicating a "critical juncture" for the cryptocurrency, according to Bitfinex analysts.

Technical analysis suggests that Bitcoin is testing the lower boundary of its three-month consolidation range, which sits between $90,000 and $92,000. If this support level breaks, the next target could be the 200-day exponential moving average (EMA) located just below $86,000.

One of the main triggers for Bitcoin’s recent price drop was U.S. President Donald Trump’s announcement about new tariffs. During a news conference with French President Emmanuel Macron on February 24, Trump confirmed that his administration’s planned 25% tariffs on imports from Canada and Mexico will proceed as scheduled. Additionally, a 10% tariff on Chinese goods has been announced, adding to market concerns.

These tariff announcements have sparked fears of increased inflation, potentially undoing progress made in disinflation over the past two years. This uncertainty has pushed investors away from risk assets, including cryptocurrencies, as they reassess their positions in light of changing economic conditions.

Bitcoin’s price movements are increasingly correlated with traditional financial markets. The S&P 500 has fallen 2.3% over the past five trading days, while the Nasdaq Composite has dropped 4% during the same period. This suppression in broader equity markets has dragged down risk assets across the board.

Another important factor in Bitcoin’s fall is the decline in institutional demand through spot exchange-tr