Bitcoin surged before quickly falling back after U.S. President Donald Trump announces new tariffs, escalating trade tensions globally.
Bitcoin’s price plunged to $81.9K, marking a 7.55% decline from its daily peak of $88.5K, after Trump imposed a series of tariffs on numerous trade partners, triggering global market turbulence and fears of a domestic recession.Â
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The tariffs, intended to protect domestic industries, have triggered a mixed market reaction—stocks retreat, cryptocurrencies face pressure, and gold hits a new all-time high of $3,152.
Bitcoin at Critical Technical Level
However, after two months of decline, Bitcoin faces a major risk, approaching a “Death Cross” on the charts.
A Death Cross happens when the 50-day moving average crosses below the 200-day, signaling further downside risk.
This means that BTC price performance is slowing down compared to its long-term trend. This is why it is considered a bearish signal.
Bitcoin’s 50-day moving average sits at $87.8K, while the 200-day is at $86.3K. If the downtrend continues, Bitcoin could dip below $76.5K, with key support at $73.1K and $71.6K.
Glassnode has identified a similar pattern, where Bitcoin’s 30-day volume-weighted average has fallen below its 180-day average, historically signaling a bearish trend lasting 3–6 months.
What Could Save Bitcoin?
Despite the bearish outlook, rising global liquidity could trigger a Bitcoin rebound. Analyst Colin Talks Crypto notes a strong correlation between Bitcoin’s price and the global M2 money supply, which has historically surged alongside Bitcoin rallies.
He notes that Bitcoin’s price movement closely mirrors the global M2 money supply, extended by 108 days into the future. With M2 climbing sharply since early May, trader predicts that Bitcoin could also be poised for a rally.
On The Flipside
- The U.S. Federal Reserve has started easing its tight financial policies, fueling speculation that it may lower interest rates to support the economy.
- Not every Death Cross leads to a sell-off. For example, after one in August 2024, Bitcoin stayed in the price range.
- If Bitcoin reclaims and closes above $91K on the daily chart, traders expect BTC to regain its bullish momentum.
Why This Matters
Bitcoin’s price movements remain closely tied to macroeconomic events, from trade policy shifts to liquidity trends. As global uncertainty rises, crypto markets face increasing volatility.
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