Bitcoin Plunges Below Key Technical Level Amid Tariff Fears, Triggering 16% Weekly Drop
Bitcoin (BTC) has experienced a dramatic plunge, not only breaching the closely watched 200-day simple moving average (SMA200)—a key metric for technical analysts—but also rattling markets with a staggering 16% weekly decline. This marks the first time since November 10 that Bitcoin has briefly dipped below the critical psychological threshold of $80,000, prompting investors to reassess the resilience of this flagship cryptocurrency amid global macroeconomic turbulence.
The trigger for this sell-off points to widespread market anxiety over looming U.S. tariff policies, a sentiment storm that has boosted demand for the U.S. dollar while temporarily dimming Bitcoin’s safe-haven appeal.
President Trump, in his characteristically assertive style, unveiled his latest trade policy blueprint: starting March 4, 2025, he plans to impose tariffs on imports from Canada and Mexico while delivering an even harsher blow to Chinese goods—doubling the existing 10% blanket tariff to 20%. This announcement landed like a depth charge in global financial markets, sending shockwaves far and wide.
A research note from ING, sent to clients on Thursday, cut to the chase: “Tariffs are expected to reclaim center stage in the market narrative, driving sustained dollar strength and exerting pressure on risk assets.” Data backs this up—the U.S. Dollar Index rebounded sharply from a Wednesday low of 106.15 to 107.30 by Friday, underscoring its pull as a haven asset.
Bitcoin’s latest tumble is far from an isolated technical correction; it’s deeply embedded in a broader global economic landscape. Uncertainty surrounding tariff policies has not only fueled safe-haven buying of the dollar but also made investors wary of high-volatility assets.
In recent years, Bitcoin has often been dubbed “digital gold,” drawing significant capital inflows during periods of inflation and monetary easing. Yet, as geopolitical economic tensions escalate and traditional safe-haven assets like the dollar and U.S. Treasuries regain favor, Bitcoin’s risk-resistance credentials are facing a stark real-world test. Analysts suggest that this breach of the SMA200 could be just the start of a short-term adjustment, with further escalation of tariff policies potentially triggering a broader reshuffling of capital flows in the crypto market.
Meanwhile, internal market dynamics are amplifying Bitcoin’s downward pressure. According to the latest report from on-chain analytics platform Glassnode, selling by short-term Bitcoin holders spiked this week, signaling an exodus of speculative funds. In contrast, long-term holders (HODLers) have yet to show significant shifts in their positions, though whether their confidence will waver in the coming weeks remains uncertain. Adding to the mix, upcoming U.S. employment data and signals from the Federal Reserve on monetary policy could introduce fresh variables into Bitcoin’s trajectory.