Bitcoin Plunges Below $85,000 as Trump’s EU Tariff Plans Rattle Markets
Bitcoin’s value continued its downward trajectory, falling below $85,000 on Wednesday after U.S. President Donald Trump announced plans to impose a 25% tariff on European Union imports during his first cabinet meeting. BTC/USD has now declined over 5% in the past 24 hours, extending what has become Bitcoin’s worst three-day stretch since 2022.
Crypto Market Reacts to Trump’s Tariff Announcement
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“We will be formally announcing our decision very shortly. Trump remarked, “25%,” according to the Financial Times, sending traditional equities markets collapsing as well as cryptocurrencies. Immediately after the statement, the S&P 500 dropped to its session low, wiping off past gains as investors considered the ramifications of rising trade conflicts.
This current threat follows similar tariff talks aimed at Canada and Mexico, generating a perfect storm of economic instability that has investors running to classic safe havens. From its all-time high of $2,956 achieved on February 24, even gold, usually regarded as a consistent source of value throughout market upheaval, lost 2.2%.
Bitcoin’s Institutional Flows Paint Concerning Picture
The latest turn in institutional interest worries Bitcoin enthusiasts especially. Data from Farside Investors shows that spot Bitcoin ETFs have seen notable outflows—more than $1.1 billion leaving these investment vehicles alone on February 24.
Based on CoinGlass data, the liquidation cascade has been severe—over $1 billion in leveraged long holdings have been eliminated over this three-day slump. This significant deleveraging has added to the fast drop in prices and possible ongoing instability.
BTC/USD Technical Analysis Points to Further Downside
Bitcoin BTC/USD technical indicators point to the bottom perhaps not yet visible. Before finding support, the bitcoin only touched $82,256; analysts are predicting possible further declines into the $71,000-$80,000 region.
Currently resting at 28.6, well within “oversold” area, the Relative Strength Index (RSI) on Bitcoin’s daily chart has dropped from August 2024 until now. Sentiment measures complement this technical weakness; the Crypto dread & Greed Index fell to 21, indicating “extreme fear” and a one-year low.
Trader and expert Michaël van de Poppe observed, “I mentioned before that this is the area for Bitcoin to hold on. Take liquidity down $85K; then, essentially everything is taken. This implies that although short-term suffering persists, major support levels are being tested.”
BTC Options Market Adds Pressure
Further down pressure is being created by the forthcoming $6.9 billion monthly options expiry on February 28. Less than $60 million of the $3.7 billion in call options are placed at $88,000 or below, hence market data shows bears have motivation to keep the price of Bitcoin below the 8:00 AM UTC expiry.
Given bulls lack the required impetus to overcome these fundamental impediments, this posture in the derivatives market points to limited upside potential in the near future.
Can Bitcoin Bounce Back Past $90,000?
Despite the recent slump, some analysts remain cautiously optimistic about Bitcoin’s medium-term prospects. Based on several recovery scenarios presented by Trader Rekt Capital, Bitcoin might go back to the $93,500.
“If this deviation is to end up as a negative wick then price could revisit ~$93500 by the end of the week,” he said, contrasting the present market movement with trends observed following the April 2024 halving event of Bitcoin.
Macroeconomic Challenges Remain
Positive economic signals are what Bitcoin needs for a long-term recovery; these are still elusive in the current surroundings. With U.S. 5-year Treasury yields falling to their lowest levels since December 2024 as investors search safety, worries about a global economic slump continue to lower investor demand for risk assets.
Furthermore closely followed for signs of the general state of the computer industry were the quarterly results of artificial intelligence behemoth Nvidia, published following market close on February 26. Market worry has been exacerbated by worries about an artificial intelligence bubble mixed with issues about global tariff tensions and U.S. export limitations on processing chips to China.
Bitcoin has a difficult path ahead even as it looks for a bottom. Near term recovering the $95,000 level seems improbable without major positive catalysts or a change in the direction of economic policy. Watching attentively for indicators of stabilization in what has become a more unstable worldwide financial scene, traders and investors remain on alert.
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