The cryptocurrency market fell flat after the announcement of a 25 percent tariff on importation of steel and aluminum products by US President Donald Trump. The protectionist measure meant to help local industries has done much to hit risk assets like Bitcoin (BTC) and Ethereum (ETH). CoinMarketCap shows BTC had fallen to $94,000, before recovering to $97,000. Ethereum fell from a low of $2,537 back up to $2,645. The tariffs are just another measure in Trump’s arsenal of trade policies, which creates further alarm of economic instability, inflation, and market volatility – all events that have historically affected BTC price.
Bitcoin and Crypto Market Reaction
Trump’s trade policies never fail to move the market. The latest tariffs saw BTC drop from $97,000 to $94,000 before recovering.
ETH fell below $2,537 before bouncing back. The Total crypto market cap went from $3.15 trillion to $3.10 trillion before recovering to $3.13 trillion. The Crypto Fear & Greed Index, a sentiment indicator, showed a drop from 46 to 43, indicating that market Fear is increasing.
This is the same level of fear as last week, meaning investors are still wary. Despite the dip, the market was resilient and bounced back as traders adjusted to the new normal.
Macroeconomic Factors Driving Volatility
Trump’s new tariffs added another layer of uncertainty to international trade, especially with China, Canada, Mexico and the European Union. Those countries will retaliate with their own tariffs that will fuel inflation, a weak U.S. dollar (which has been good for Bitcoin), and market corrections as investors adjust their strategy. Experts believe the ongoing trade restrictions will Drive institutional investors towards alternative assets like Bitcoin, increasing interest in DeFi solutions and encouraging global use of Bitcoin as a currency hedge.
Expert View: Market Bounce Back and Bitcoin’s Short-Term
Bybit co-founder and CEO Ben Zhou estimated $8 billion to $10 billion in crypto liquidations, the scale of the impact.
Analysts say strong fundamentals mean Bitcoin will bounce back quickly. If history is a guide, Bitcoin has always dropped during macroeconomic shocks and recovered when investors hedge against uncertainty. In the meantime, the number of institutions investing in it is rising, with companies increasing their Bitcoin allocation since the economic downturn began.
Bitcoin Price Movement Scenarios
| Scenario | Impact on Bitcoin |
| Tariffs continue to escalate | Could drop below $90,000 due to increased fear. |
| U.S. dollar weakens more | Could rally above $100,000 as investors hedge against inflation. |
| Institutional demand grows | Stabilize around $97,000–$105,000 in the near term. |
With the tariffs timeline unknown, Bitcoin’s next move will depend on how the global market reacts in the next few weeks.
What’s Next for Bitcoin? Key Levels to Watch
Analysts highlight key technical levels to look out for:
- $94,000 support – If this holds, BTC may rally again.
- $100,000 resistance – A move above could start a bull trend.
- $90,000 critical support – A drop below that could be bad and might mean more downside.
Catalysts for BTC Price Action
- Federal Reserve Decisions – Rate cuts will increase demand for BTC.
- Regulatory Updates – Clear U.S. crypto policies will boost sentiment.
- Institutional Investments – Unabated ETF inflows will be a source of stability. Despite the short-term volatility, Bitcoin’s long-term value store is strong.
Conclusion
The quick sell off in Bitcoin after Trump’s 25% tariffs on steel and aluminum showed macro policy still impacts crypto markets. The bounce back since then means investors still see Bitcoin as a hedge against economic chaos.
As institutional interest grows and Bitcoin holds above key support levels, the market direction may very well depend on trade developments, inflation, and the Fed’s bottom line. Traders are in for wild swings until geopolitics and economics stop being so unpredictable.
Stay updated with Deythere as we’re available around the clock, providing you with updated information about the state of the crypto world.
FAQs
1. Why did BTC drop after Trump’s tariff announcement?
BTC dropped because of market uncertainty and risk-off sentiment as investors reacted to the impact of tariffs on the global economy.
2. How did the crypto market react overall?
Total crypto market cap from $3.15 trillion to $3.10 trillion then back to $3.13 trillion, showing resilience.
3. What is the Crypto Fear & Greed Index and why does it matter?
The index measures market sentiment ‘between 0 (Extreme Fear) and 100 (Extreme Greed). A reading of 43 means fears are growing and are affecting investor behavior.
4. Can trade tensions work in BTC’s favor?
Yes, if tariffs weaken the U.S. dollar, that will make BTC more attractive to those looking for an alternative store of value.
5. What are the key levels to watch in BTC?
$94,000 Support – Major level to hold.
$100,000 Resistance – Break above may confirm higher prices.
$90,000 Support– Breach of this level means more downside.
Glossary
Tariff: A ‘tax on imported goods to control trade and protect domestic industries.
Bitcoin Liquidation: The ‘forced closure of a leveraged position due to lack of funds, often resulting from volatility.
Crypto Fear & Greed Index: A metric of investor sentiment in the crypto market based on volatility, momentum, and market trend.
Institutional Investors: The large financial ‘players, hedge funds, and corporations investing a huge amount of capital into assets such as BTC.
Risk-Off Sentiment: That phase of a market when money is being pulled out of volatile assets such as crypto into safer ‘investments.
References
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