Bitcoin (BTC) has experienced a noticeable decline of over 5% at the outset of the month, a drop attributed to newly announced tariffs by President Donald Trump. The cryptocurrency market has reacted sharply, resulting in a widespread sell-off fueled by mounting concerns over inflation and the direction of interest rate policy.
The price of Bitcoin fell from $118,920 to $114,000 on Friday following the announcement of the tariffs, which range from 10% to 41%. This unexpected move has spurred anxiety among traders, who now fear increased costs that could elevate inflation levels further. The implication is clear: higher inflation might hinder the Federal Reserve’s ability to lower interest rates, prompting investors to withdraw from more volatile assets like Bitcoin.
Market analysis from CryptoQuant highlighted a staggering $195 million in liquidations of long positions during this decline. Furthermore, around 21,400 BTC were swiftly moved to exchanges by short-term holders, many of whom sold at a loss—an indicator that traders are opting to mitigate their risks in anticipation of further price drops.
Seasonal patterns in Bitcoin prices also seem to play a role in the current scenario. History shows that the months of August and September have often been unkind to Bitcoin, with prices declining in 8 out of the last 12 years during this period. This seasonal trend adds another layer of complexity to the current market situation.
As analysts turn their attention to critical price levels, the next support for Bitcoin appears to hover around $111,600. This threshold is significant as many investors had previously purchased at this level, suggesting it might offer formidable resistance against further declines. Additionally, the $112,000 mark, previously Bitcoin’s all-time high, is being closely monitored by technical traders as another critical point of focus.
In these turbulent times, Bitcoin enthusiasts and investors alike are advised to keep a close eye on these key levels, as the market navigates the impact of new economic policies and persistent seasonal trends.
