TLDR
- Bitcoin fell to $83,421 following Trump’s announcement of a 10% universal tariff on all imports
- Major cryptocurrency-related stocks tumbled in extended trading, with Coinbase dropping 7.5%
- Bitcoin velocity hit a five-month low, indicating cautious investor sentiment
- Long-term holders show strong conviction despite market uncertainty
- BTC needs to reclaim $85,000 as support to recover recent losses
Bitcoin, the world’s largest cryptocurrency, has experienced a notable decline following U.S. President Donald Trump’s recent trade policy announcements.
The digital asset fell to $83,421 as investors reacted to news of comprehensive tariffs that sparked concerns about global trade tensions.
BTC Price
On Thursday, President Trump announced a sweeping overhaul of U.S. trade policy. The plan introduces a 10% universal tariff on all imported goods, effective April 5, 2025.
The policy also includes reciprocal tariffs targeting specific nations with trade barriers against U.S. products. These additional tariffs are set to take effect on April 9, 2025.
Under the new policy, China faces a combined tariff of 54%, including a new 34% surcharge. Other countries facing steep tariffs include Japan (24%), European Union (20%), India (26%), and Vietnam (46%).
A 25% tariff on foreign-made automobiles and key auto parts will take effect on April 3, 2025.
🚨 @POTUS signs an Executive Order instituting reciprocal tariffs on countries throughout the world.
It's LIBERATION DAY in America! pic.twitter.com/p7UnfE617B
— Rapid Response 47 (@RapidResponse47) April 2, 2025
Market Reaction and Risk Sentiment
These developments have heightened investor concerns about a potential global trade war. The news triggered a broader risk-off sentiment across financial markets worldwide.
Major U.S. stock index futures plunged in early Asian trading hours on Thursday. Most Asian stock indices also tumbled in response to the tariff announcement.
Bitcoin, often described as “digital gold,” has sometimes benefited from economic uncertainty in the past. However, its recent price action suggests it remains closely tied to broader risk appetite in the markets.
In risk-off environments, investors typically move away from volatile assets like cryptocurrencies. Many turn instead to traditional safe-haven assets such as gold, which reached record highs in Asian trading on Friday.
Shares of crypto-related companies followed Bitcoin’s downward trend. Coinbase Global Inc shares dropped 7.5% in extended trading on Wednesday.
Bitcoin miners were also affected, with Marathon Digital falling 7.3% and Riot Platforms sliding 7%. Shares of Strategy (formerly MicroStrategy) fell 4.6% after the bell.
Investor Behavior and Technical Analysis
Bitcoin’s velocity, a measure of cryptocurrency circulation, dipped to a five-month low last week. This decline indicates that Bitcoin holders are becoming more cautious, with fewer coins being transacted.
As circulation decreases, it often leads to subdued price growth, which BTC has experienced recently. The reduced velocity reflects a shift in investor sentiment, with hesitation among market participants contributing to Bitcoin’s sluggish recovery.
Despite short-term caution, mid-term holders (those holding for 3-6 months) have seen increased wealth during this period. Many of these investors are transitioning into long-term holders, showing strong conviction even during market uncertainty.
Spending from this group has reached its lowest levels since mid-2021. This suggests that long-term holders are less likely to sell during market downturns, potentially reducing overall selling pressure.
At the time of writing, Bitcoin’s price stands at $83,403, just below the crucial $85,000 resistance level. Earlier this week, Bitcoin had surged to $88,500 before declining after Trump’s tariff announcement.
For Bitcoin to recover recent losses, it must first reclaim $85,000 as support. A confirmed recovery would be marked by Bitcoin pushing past $89,800, potentially opening a path toward higher levels.
If Bitcoin fails to breach $85,000 and circulation remains low, its price could fall back to the next key support level at $80,301. Such a decline would invalidate the bullish outlook and could lead to further consolidation in the short term.
Most altcoins followed Bitcoin’s downward trend on Thursday. Ethereum, the second-largest cryptocurrency, fell 1.2% to $1,832.57. XRP edged 0.2% lower to $2.0687, while Solana declined 3.2%.
Among meme tokens, Dogecoin lost 1%, while the $TRUMP token slumped over 7%.
