Bitcoin (BTC) dipped to nearly $75,000 early Wednesday, before slightly recovering, as Trump’s sweeping global tariffs went into effect on the same day. This market movement has raised concerns among traders and investors alike, as broader implications for both cryptocurrency and traditional financial markets come into play.
Ether (ETH) experienced a significant decline, diving by 10%, leading the losses among major tokens. Other cryptocurrencies such as XRP (XRP), Dogecoin (DOGE), BNB Chain’s BNB, Solana’s SOL, and Cardano’s ADA also saw declines of more than 5%. Overall, the cryptocurrency market capitalization decreased by 6%, extending a 7-day slide that amounts to nearly 15%.
Smaller tokens were not spared, with the trendy upstart Berachain’s BERA down 20%. Memecoins like Bonk (BONK), Pepe (PEPE), and Floki (FLOKI) also experienced significant drops, each declining by over 9%.
The retreat from major cryptocurrencies continued as investors reacted to the new tariffs, reversing all gains from the previous day’s relief rally. Tariffs on Chinese goods were sharply raised to 104%, alongside increased import taxes on over 60 trading partners.
In the following days, U.S. Treasuries also saw a selloff, with 30-year yields soaring more than 20 basis points to 4.98%. This dramatic shift from the safe haven status typically enjoyed by bond investors is a concerning sign for traders navigating this volatile environment.
Market analysts have speculated that the sell-off may stem from a forced liquidation of a large player in the market. Jim Bianco, the founder of Bianco Research, noted on social media, “Since Friday’s close to now, the 30-year yield is up 56 bps, in three trading days. The last time this yield rose this much in 3 days was January 7, 1982, when the yield was 14%.” This raises critical questions about the sustainability of recent market trends.
He further elaborated, “This kind of historic move is caused by a forced liquidation; human managers do not decide the outlook for rates at midnight ET.” Rising yields indicate falling bond prices and may compound the cost of borrowing for the U.S. government, which could further exacerbate an already strained federal deficit due to heavy debt levels.
Investor anxiety has increased regarding the potential ramifications of a prolonged trade war, which experts say could weaken global trade, disrupt supply chains, and hinder U.S. economic growth. This environment is expected to put additional pressure on U.S. equity markets and Bitcoin, which often mirrors U.S. market trends.
The recent sell-off suggests that markets are currently pricing in inflation, though prolonged uncertainty could alter this dynamic significantly.
Bears Take Charge
Some traders are now speculating a further drop in Bitcoin’s price, potentially reaching as low as $70,000 amid escalating tariff tensions. Ryan Lee, Chief Analyst at Bitget Research, mentioned via Telegram, “For investors, the short-term outlook calls for caution; however, a decline to $70,000–$75,000 for Bitcoin is possible if trade tensions escalate. This dip, nonetheless, could present a buying opportunity for long-term investors.”
Lee recommends a strategy of dollar-cost averaging into Bitcoin while keeping an eye on altcoins like Solana for higher-risk, potential upside later on. He remains optimistic about a market recovery, indicating that if macro conditions stabilize or pro-crypto policies begin to emerge, Bitcoin could reach between $95,000 and $100,000 by late 2025, pushing the market cap past $3 trillion once again.
Despite the pressures posed by tariffs and a prevailing risk-off sentiment affecting altcoins significantly, Bitcoin’s resilience and rising market dominance, near 60%, suggest that the ecosystem’s fundamentals remain robust, backed by institutional adoption and favorable long-term trends such as the halving cycle.
