Bitcoin Resists Economic Uncertainty and Recovers

The world's leading cryptocurrency rebounds after hitting support at $78,400, as Trump's tariff war weakens the dollar and increases demand for risk assets.

The price of Bitcoin rallied 5.52% this Tuesday amid economic uncertainty, closing at $82,932 after finding support at $78,400. The volatility generated by Donald Trump's new tariffs on Canadian steel weakened the dollar and increased demand for risk assets, benefiting the leading cryptocurrency.

Bitcoin consolidated key support at $78,400 but remains trading below the 200-period exponential moving average (EMA200), located at $85,700. / Tradingview

Trump's Tariff War and Its Impact on Markets

President Donald Trump announced a 50% tariff increase on steel and aluminum from Ontario, Canada, in response to a tax imposed by the province on electricity exported to the US. This measure escalated the trade war and weakened the dollar index (DXY), which fell to 103.41 points, its lowest level in four months.

The weak dollar boosted demand for risky assets, such as Bitcoin, while 10-year Treasury bonds fell 0.51%. On the other hand, yields on these bonds rose 1.54% to 4.28%, reflecting a shift in investor preference.

Bitcoin as a Safe Haven Amid Economic Uncertainty

Bitcoin not only benefited from the weak dollar but could also be acting as a safe haven asset amid potential stagflation in the US. The market capitalization of the crypto sector increased 4.66% to $117.77 billion. Furthermore, open interest in Bitcoin futures grew 1.25% to $46.50 billion, indicating a slight recovery in investor interest.

However, Bitcoin ETFs recorded net outflows of $278.40 million on Monday and $78.30 million on Tuesday, according to data from CoinGlass. This suggests that, although the spot market is showing strength, institutional investors may be taking profits.

Technical Indicators: What to Expect?

Bitcoin consolidated key support at $78,400 but remains below the 200-period exponential moving average (EMA200) at $85,700, indicating long-term bearish sentiment. This level acts as dynamic resistance, and investors may be considering a retest of this area.

According to Bitcoin Magazine Pro, 87.35% of Bitcoin addresses are still in profit, suggesting further liquidations could occur if the market continues to decline. However, trading volume is above the 25-day average, indicating stronger sellers.

Where Is Bitcoin Going From Here?

Bitcoin's recovery appears to be driven by macroeconomic factors, such as the weaker dollar and Trump's tariff war. However, technical indicators and ETF outflows suggest the path to a sustained rally could be rocky.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrencies are volatile assets; invest responsibly and conduct your own research.