Emily Walker
The cryptocurrency market is currently facing significant challenges. Bitcoin has dropped below the $100,000 mark, facing turmoil due to economic instability caused by US President Donald Trump’s latest tariffs. Investors are watching closely as global markets react to escalating trade tensions.
Tariff-Induced Market Turmoil
President Trump’s decision to impose a 25% tariff on imports from both Canada and Mexico, alongside a 10% tariff on Chinese goods, has sent shockwaves through financial markets. In response, affected countries have quickly retaliated, raising concerns of a potential trade war. This action has led to an uptick in crude oil prices and a significant downturn in US stock futures.
Even Bitcoin, often seen as a safeguard against traditional market volatility, has been severely affected, plummeting to its lowest level in three weeks at nearly $93,500. The downturn prompted many investors to withdraw, causing other major cryptocurrencies like Ethereum to experience notable declines as well.
Increasing Cryptocurrency Sell-Off
As concerns about the economy grow, Bitcoin’s value continues to drop rapidly. Data from Glassnode reveals that long-term holders are liquidating their assets, indicating a significant shift in sentiment within the market. Analysts caution that further downturns could be on the horizon.
Investors are particularly attentive to the crucial $90,000 support level, with fears that a drop below this threshold could lead prices down to $80,000. Currently, Bitcoin is down approximately 15% from its January 20 peak of $109,350. Nonetheless, seasoned traders often regard these adjustments as typical in bullish markets, where pullbacks of around 30% are not uncommon.
Not everyone is panicking, however. Renowned investor Robert Kiyosaki perceives the situation as a golden opportunity for purchasing. In a post on X, formerly Twitter, he noted that the tariffs may lead to decreased prices, presenting a chance to buy more Bitcoin:
TRUMP TARIFFS 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 Braces for Increased Volatility
The global financial sphere is experiencing a tightening grip. The newly applied tariffs are exacerbating strain on supply chains, igniting fears of rising inflation and an economic downturn. Coupled with the Federal Reserve’s cautious monetary policies, investors are bracing for potential turbulence in the forthcoming weeks.
Counteractions from Canada and Mexico are already on the table, and China has hinted at possible economic repercussions. Market analysts warn that if these tensions persist, Bitcoin and other risk assets may see further drops before they stabilize.
Image courtesy of Gemini Imagen, chart via TradingView