Bitcoin's Price Under Scrutiny at $81K Due to Market Anxiety over Trump's Tariff Plans
Updated Article:
Gimme the Lowdown (in Crypto We Trust)
- Bitcoin plunged to a two-week low of $81,300 on March 31, 2025, trading around $82,000 as of the same date.
- Fears over Trump's proposed tariffs against up to 25 countries are sending shockwaves through risk assets.
- A whopping 4k BTC (that's about $332 million) found its way to Kraken, hinting at possible sell-offs.
- Goldman Sachs bumped up the odds of a U.S. recession from 20% to 35% within the next 12 months.
- The crypto market shed a staggering $250 billion in just a week, with altcoins taking a steeper nosedive.
The cryptoverse is in the red as Bitcoin sinks below $82,000, after touching a near two-week low of $81,300 in early trading. This latest slide has erased much of the impressive gains scored earlier this year.
Investors have been reacting to news about President Trump's plans to slap reciprocal tariffs on up to 25 countries. The Wall Street Journal reported that these tariffs could reach a whopping 20% against individual nations.
The big announcement is set for April 2, and it's causing quite a stir in the markets. Stock exchanges are nervous about the potential drama, with key sectors expected to come under the firing line.
Meanwhile, Trump's earlier chatter about setting up a Bitcoin reserve has been overshadowed by the looming tariff news. Traders generally view tariffs as potentially destabilizing forces in global trade.
Since its record-high around Trump's January inauguration, Bitcoin has lost close to 40% of its value. This vulnerability to wider economic concerns has been made crystal clear.
Adding fuel to the fire, Goldman Sachs has ramped up its U.S. recession forecast. The bank now reckons a recession is 35% likelihood within the next 12 months, up from its initial 20% prediction.
The bank cites various factors for its gloomy outlook, including uncertainty over Trump's tariffs, raging inflation, and deteriorating consumer and business sentiment.
Data from the blockchain reveals a spooky transfer of 4k BTC ($332 million) to the Kraken exchange, a move often signaling sell-offs.
The rest of the crypto market is looking just as grim. The total market cap has plummeted $250 billion in a week, standing at $2.75 trillion according to CoinGecko.
Ethereum, the crypto king after Bitcoin, dropped by 1.5%, reaching $1,809.93. It's down 19.2% for March alone and hit a 16-month low.
XRP took a tumble too, falling by 3.5% to $2.10. Despite that, its value has surged following the SEC's decision to drop its case against Ripple. Other big names like Cardano (3.4%) and Solana (flatter than flat) also saw declines.
Tech Talk
Analysts are spotting concerning patterns on Bitcoin's charts, with the impending "death cross." This happens when short-term moving averages breach longer-term averages, possibly signaling more downturn to come.
Some question if this could mark the bottom before any potential recovery. Bitcoin continues to mirror the S&P 500 and Nasdaq in its price action.
Interestingly, gold has hit new record highs above $3,090 while Bitcoin heads south. Some commentators are less than impressed with the "digital gold" narrative amid this slump.
Crypto expert Ali Martinez has flagged another worrying trend. He reports that the global money supply has dipped nearly $1 trillion over the past fortnight.
Martinez also notes increased selling by Bitcoin miners. In the past week, miners have offloaded more than 2,400 BTC, worth roughly $220 million.
Recent US PCE data suggests ongoing inflation, triggering concerns over tight monetary policy. This tightening makes riskier assets like Bitcoin more vulnerable.
As we step into April, traders will be watching Trump's tariff announcement closely. If it's less severe than feared, the crypto market could see some relief. But if not, we might be in for a bumpy ride!
Enrichment Data:
In essence, Bitcoin's slide in March 2025 is a complex brew of market correction, lack of investor confidence, and broader economic concerns, including global trade tensions and risks of a U.S. recession.
Factors Affecting Bitcoin's Price Dive
- Correction Phase: Bitcoin was entering a correction phase, trading at roughly $87,000 on March 28, 2025. This represented a drop of nearly 20% from the high of $109,000 in January. Corrections are common during market cycles, indicating anxiety and uncertainty in investors and traders [4].
- Inadequate Investor Confidence: Lack of strong support from market participants due to technical factors, such as short-term holders facing losses and low liquidity, has hindered Bitcoin's efforts to break resistance levels like $90,000. The absence of eager buyers has exacerbated the situation [4].
- Economic Worries:
- US Trade Policies: The prospect of a 25% tariff on automotive imports by President Donald Trump raises concerns about inflation and potential economic slowdown. These policies can impact investor sentiment and market stability, indirectly affecting Bitcoin [4].
- Global Trade Tensions: Global economic concerns, such as those related to China's real estate sector, reinforce Bitcoin's reputation as a risk-on asset. This perception can increase market volatility during periods of economic unease [FAQ].
- Volatility and Market Reactions: Sharp price movements, triggered by strategic announcements and panicked selling, have accentuated Bitcoin's price volatility. This volatile market environment contributes to the slide in prices [2].
Trade Tariffs and U.S. Recession Risks
- Tariffs: Tariffs can trigger economic instability by raising costs for importers and sparking inflation. This economic disarray can damage investor confidence in risky assets like Bitcoin.
- U.S. Recession Risks: A potential U.S. recession could intensify market volatility and raise investor risk aversion. As a result, riskier assets like Bitcoin may be offloaded by investors, adding to the downward pressure on prices.
- As Bitcoin continues to plunge below $82,000, the cryptocurrency market is showing signs of a red trend, with fears of a U.S. recession and President Trump's proposed tariffs adding to the uncertainties.
- The proposed tariffs against up to 25 countries, if implemented, could potentially destabilize global trade and impact the overall investor sentiment, making riskier assets like Bitcoin more vulnerable to losses.
- The rising odds of a U.S. recession, according to Goldman Sachs, from 20% to 35% in the next 12 months, could further intensify market volatility and increase risk aversion among investors, potentially leading to offloading of riskier assets like Bitcoin and Ethereum.
