Bitcoin Falls to $83K, Erasing Weekend Gains After Trump’s Tariff Move

Bitcoin has dropped 9.52% today, falling back to the $83,000 level after a brief surge over the weekend. This comes just after the cryptocurrency hit over $94,000, driven by excitement over President Donald Trump's proposed U.S. Crypto Strategic Reserve. However, a combination of skepticism and new geopolitical tensions has caused the market to pull back.

The Surge After Trump’s Announcement

Bitcoin's weekend rally was impressive, with the cryptocurrency briefly spiking to $92,905 after Trump's announcement on Truth social. The U.S. president revealed plans to include Bitcoin, Ethereum, XRP, Solana, and Cardano in a proposed U.S. Crypto Strategic Reserve, with Bitcoin and Ethereum positioned as central to this plan. This sparked significant optimism, with Bitcoin climbing by 10%, while Ethereum surged by 13%, and Cardano led the pack with a massive 50% rally. But now everyone shared the initial excitement.

The experts agree that while Trump’s announcement may have sparked some short-term enthusiasm, it was not a game-changer in the long run. As a Japanese crypto analyst, Yuya Hasegawa had said, "The effect of Trump’s crypto reserve comment will not continue.". He also added that it wasn’t a particularly new announcement, as they’re still moving in the direction of establishing a crypto reserve. While the crypto prices may go up due to the other developments this week, Trump’s comment is already digested.

Only yesterday we debated whether the surge will hold, and as it turned out, new market factors emerged that erased the previous gains.

New Tariffs and Economic Tensions Shake Markets

The main thing that caused today’s market crash was Trump’s confirmation of new tariffs that provoked unease among investors. Starting from March 4, 25% tariffs on Canada and Mexico will take effect alongside a 20% increase on Chinese imports. Similar to the major tariff announcement in February, which triggered a major sell-off in the crypto market, today's news seems to cause a comparable reaction.

New tariffs have sparked a general retreat from volatile assets, with cryptocurrencies seeing significant declines. Consequently, BTC has dropped 9.52% in a day and is now sitting at around $83K. Its market cap has also fallen to $1.66 trillion, with its dominance now at 60.22%. The overall volatility in the markets is expected to continue as the tariffs begin to affect the economy.

Meanwhile, stablecoins accounted for 93.21% of total crypto trading, reaching $172.97 billion, according to CoinMarketCap. This shows that investors are shifting to safer assets due to rising uncertainty.

Bitcoin’s Price Outlook

Market experts are advising caution as the price of Bitcoin tests its support levels. Alankar Saxena, CTO and co-founder of Mudrex, emphasized the importance of watching Bitcoin’s $81,000 support. If BTC breaks this level, further downside could be possible. On the flip side, the resistance remains around $92,000, suggesting that there’s room for recovery if market sentiment shifts.

As Saxena notes, there’s still potential for Bitcoin to rebound. However, for that to happen, investor confidence needs to return, especially with the geopolitical uncertainty and tariff issues hanging over the market.

All in all, while Trump's crypto strategic reserve announcement may have sparked some initial excitement, it’s clear that broader market forces, especially economic and political factors, are taking center stage. Investors will be watching closely for any updates, particularly from the White House Crypto Summit scheduled for later this week, which might shed light on the direction of the proposed reserve.

In the meantime, the uncertainty surrounding global trade, along with continued regulatory concerns, means that Bitcoin and other cryptocurrencies are likely to remain volatile.