Trump and tariffs shake the bitcoin market again

The world's leading cryptocurrency loses key supports and approaches critical levels, as investors react to Trump's economic policies and the trade war.

The price of bitcoin fell 4.88% on Monday, reaching $91,559, after President Donald Trump's announcements about new tariffs on Canada and Mexico. Inflation uncertainty and the possible response of the Federal Reserve (FED) generate a bearish sentiment in the markets, affecting both stocks and cryptocurrencies.

Bitcoin now faces a key fixed support at $91,200. If it loses this level, it could fall to areas close to $87,500 in the coming sessions / Tradingview

Trump and tariffs: A blow to bitcoin and the markets

President Donald Trump's announcement to impose tariffs on imports from Canada and Mexico generated a wave of uncertainty in global markets. Bitcoin, considered a risk asset because it is highly correlated with indices such as the Russell 2000, was no exception. The world's leading cryptocurrency fell 4.88% on Monday, touching a low of $91,349 at the time of this report and breaking through the dynamic support of the 100-period moving average, located at $94,100.

Inflation fears arising from tariffs could limit the Federal Reserve's (FED) ability to cut interest rates, a scenario that generates nervousness among investors. "A high-inflation economic environment would make the FED unable to cut interest rates," analysts explained.

Falling markets: Stocks and cryptocurrencies under pressure

US stocks also recorded significant losses, dragging bitcoin down. However, the opposite behavior was observed in the US Treasury bond market. The yield on the 10-year Treasury bond fell 0.70%, standing at 4.40%, reflecting greater demand for safe assets amid uncertainty.

Despite this, altcoins and Bitcoin maintained a significant decline on Monday. Investors seem to be overreacting to the news, while speculating on the real impact of the Trump-driven trade war.

Bitcoin: Key Support at Risk and Bearish Sentiment

Bitcoin is now facing a key fixed support at $91,200. If it loses this level, it could fall to areas close to $87,500 in the coming sessions. The Bull Bear Power (BBP) indicator stood at -6,329, indicating that the bears are in control of the market, although still in neutral zone.

Trading volume slightly exceeded the 25-day average, suggesting an increase in selling activity. In addition, according to data from Coinglass, an outflow of 1,402 BTC was recorded from centralized exchanges. This indicates that investors are withdrawing their funds to keep them in self-custody wallets, showing some long-term confidence in the cryptocurrency.

Traders Exhausted: BTC Inventories at Lows

According to data from IntoTheBlock, Bitcoin traders, who hold the cryptocurrency for the short term, are reaching low levels in their inventories. They currently hold 1.29 million BTC, very close to the low of 1.27 million recorded in October 2024. This suggests that many have sold during the last bullish move, reducing short-term selling pressure.

As Trump continues with his economic agenda, which includes government spending cuts and the possible imposition of tariffs, markets remain on alert. Bitcoin, although showing long-term resilience, faces technical and sentimental challenges in the short term. Investors will need to keep an eye on the next moves by the FED and the political decisions of the Trump administration, which could define the direction of the markets in the coming months.

Disclaimer: This news is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are volatile and involve risk. Do your research before making financial decisions.