The market for cryptocurrencies is under heavy stress. Slipping below the $100,000 level, Bitcoin has been battered by economic uncertainty brought on by US President Donald Trump’s new wave of tariffs. Investors are now on edge, observing anxiously as global markets respond to the rising trade tensions.
Tariffs Spark Market Anxiety
Financial markets have been rocked by Trump’s move to levy a 25% tariff on imports from Canada and Mexico as well as a 10% tariff on Chinese goods. Already, impacted nations have responded with quick retaliations that raise the possibility of a full-fledged trade war. Apart from a rise in crude oil prices, the reaction of the equities market has been severe, with a clear drop in US stock futures.
Even Bitcoin, which is frequently regarded as a hedge against more conventional market volatility, was not exempt. The biggest cryptocurrency fell to its lowest point in three weeks, at almost $93,500. As investors pulled back in reaction to the mounting uncertainty, other significant digital currencies, like Ethereum, also saw significant declines.
Cryptocurrency Sell-Off Picks Up Speed
Bitcoin’s price drop has accelerated as economic uncertainty increases. Long-term holders are cutting back on their holdings, according to Glassnode data, which points to a change in sentiment. The market is becoming more cautious and fearful as analysts warn that more declines may be imminent.
BTCUSD trading at $93,900 on the daily chart: TradingView.com
Bitcoin investors are closely monitoring the $90,000 support level, with concerns that a significant drop below it could push prices toward $80,000. Currently, Bitcoin is down about 15% from its January 20 record high of $109,350. However, experienced traders view such corrections as normal in bull markets, where pullbacks of around 30% have been common.
The decline isn’t making everyone freak out. Robert Kiyosaki, renowned investor and financial author, sees it as a purchasing opportunity. On X, formerly Twitter, he said the tariffs will be a good opportunity to buy more bitcoin:
TRUMP TARRIFS BEGIN: Gold, silver, Bitcoin may crash. GOOD. Will buy more after prices crash. Real problem is DEBT….which will only get worse. CRASHES mean assets are on sale. Time to get richer.
— Robert Kiyosaki (@theRealKiyosaki) January 31, 2025
The World Prepares For More Volatility
The overall financial landscape feels the crunch. The most recently imposed tariffs have put further pressure on supply chains, resulting in the worst fear of increased inflation and an economic slowdown. Given the cautious stance of the Federal Reserve with monetary policy, investors are put at risk of intense volatility in the weeks ahead.
Canada and Mexico have already announced countermeasures to Trump’s tariffs, and China has hinted at possible economic retaliation. Market experts believe that if the tensions continue to escalate, risk assets, including Bitcoin, may see further declines before stabilizing.
Featured image from Gemini Imagen, chart from TradingView
Source: https://bitcoinist.com/trump-tariffs-hit-crypto-bitcoin-crashes-to-93k/