Bitcoin’s price has fallen over 5% in the last 24 hours, now at about $95,279. This drop happened quickly after some significant changes in the global economy, including an essential statement by US President Donald Trump about new taxes on products from Canada, Mexico, and China. Bitcoin has been above $100,000 since mid-January, so this drop raises a lot of worry in the crypto market. What is causing the decline? Let’s simplify it.
1. Trump Tariff Announcement Stirs Up
Trump’s tariff announcement has sparked global market reactions, affecting Bitcoin prices. Trump stated that Mexico and Canada would pay 25% and China 10% for imports, this will start on February 4. This decision has raised trade war concerns, making buyers reassess their purchases. As uncertainty rises, many investors are dumping Bitcoin for gold or US Treasury bonds. This is why Bitcoin’s price is falling rapidly with the market collapse.
2. Ripples from liquidations
Bitcoin’s price drop has voided numerous futures trades. Bitcoin leverage contracts closed over $465 million in 24 hours. Investing $389 million in lengthy BTC investments exacerbated the decline. The sale of leveraged transactions causes a chain reaction that lowers Bitcoin’s price as traders close their positions.
3. Strong Market Bearishness
Bitcoin’s image is deteriorating due to market reactions to trade wars. QCP Capital, a trading company, claims the price decline isn’t just due to Bitcoin. A more significant shift is unfolding across diverse investments. Cryptocurrency and other risky assets have fallen as investors seek safer alternatives.
4. Key Bitcoin Support Area
The 100-day SMA, around $93,899, is a key support level for Bitcoin. Investors are watching to see if it can stay above this level. If it can’t, it may fall further. If it continues above the SMA, Bitcoin may return to the 50-day SMA around $99,000.
Conclusion
Bitcoin’s price is falling due to global economic concerns and market sell-offs. Bitcoin’s future is uncertain, but maintaining critical support will determine its speedy return. The next few days may affect Bitcoin’s price as the market reacts to Trump’s tariff news.
