Is Bitcoin headed below $90,000 amid Trump’s tariffs?

Late January and early February 2025 have proven turbulent for both the cryptocurrency and the stock market . China’s novel DeepSeek artificial intelligence ( AI ) model was the first to generate strong headwinds as it marked the entry of a new and powerful competitor to a sector otherwise dominated by American big tech. The other, more recent shock arose ‘on-shore’ as the financial markets reacted swiftly and violently to President Donald Trump’s tariff order that targeted partners and allies with more severe restrictions – 25% on trade with Mexico and Canada – and less severe on countries marked as ‘foreign adversaries – 10% on China. Bitcoin ( BTC ) experienced one of the strongest reactions as it plunged from highs above $105,000 on January 31 to its press time price of $95,759, though it also saw an even lower low earlier on February 3 when it collapsed below $93,000 before retracing from the support zone as buyers stepped in. BTC 1-week price chart. Source: FInbold Why Bitcoin might be headed below $90,000 The $10,000 price drop reignited the question of whether BTC is yet again headed for a collapse under $90,000. Indeed, the swift and violent reaction to the tariffs was primarily initiated by a sudden loss of appetite as the new tariffs constitute a venture into ‘uncharted’ territory for the 21st century. Many economists and experts have added to the concerns as they criticized the opening shots of what may turn into a global trade war as ill-considered and ultimately pointless. The fact that the U.S. is, so far, primarily targeting one long-standing ally and one nation with which it has close links has been especially contentious. Still, as evidenced by the recovery from the lows near $93,000, Bitcoin’s old support levels remain in place . Furthermore, since BTC is not dependent on supply chains that the tariffs might disrupt, there is no direct reason for the cryptocurrency to witness a major plunge, and there is a strong possibility it will, as soon as the contagion gives way, bounce back much like it did following DeepSeek’s emergence. On the other hand, should a loss of appetite for risk persist, Bitcoin’s recovery could prove short-lived, and should it plunge below $90,000, an even greater downturn might be in the cards, as multiple blockchain experts have previously pointed out that there are few decisive support levels within that zone. Finally, despite the initial round of tariffs likely having a somewhat limited effect and despite major institutions like Goldman Sachs (NYSE: GS ) anticipating they would be short-lived , they could have long-lasting consequences as it is doubtful if America’s allies – and adversaries – will approach trade with the superpower in the future in the same way as they have in the last few decades. Why the Monday morning bell might be critical for Bitcoin price Elsewhere, it is likely that Bitcoin’s next move – whether it be a continued downtrend or an upswing – will be decided by the broader state of the financial markets. Both the weekend trading and the extended session generally have lower volume meaning that fewer actors participate in the market and that each individual trade has a greater consequence. Should the regular trading session prove as shocking as the overnight one, BTC might truly be at risk of plunging below $90,000 and possibly even lower. Such a risk would be further compounded if the cryptocurrency loses its press time upward momentum and fails to reclaim the psychologically important $100,000 level by the time the morning bell rings. Featured image via Shutterstock The post Is Bitcoin headed below $90,000 amid Trump’s tariffs? appeared first on Finbold .

Finbold

You can visit the page to read the article.
Source: Finbold