Bitcoin saw a sharp decline this week as trade tensions between the U.S. and China escalated. The announcement of unexpected tariffs by President Donald Trump shook financial markets and weighed heavily on investor sentiment. At its lowest, Bitcoin fell to $74,600, before recovering slightly to trade around $76,048.
Trade War Hits Bitcoin Sentiment
Bitcoin’s fall came in response to new 104% tariffs on Chinese imports. These tariffs were higher than expected, sparking fear across global markets. Investors shifted focus to safe-haven assets like gold and the Japanese yen, pushing Bitcoin further down.
Despite its status as a digital alternative to gold, Bitcoin’s volatility remains a key concern. Some investors still see it as a hedge, but many are turning cautious.
Corporate Losses Add to Downward Pressure
Michael Saylor Strategy, the largest corporate holder of Bitcoin, reported $5.9 billion in unrealized losses in Q1 2025. The losses stem from Bitcoin’s recent decline. Still, the company stated it would not sell any new holdings for now. It continues to hold its position, despite the growing market volatility.
Cryptocurrency Market (Bitcoin) Sees Broad Decline
Following Bitcoin’s drop, other cryptocurrencies followed suit.
- Ethereum plunged 7.4%, hitting a two-year low.
- Ripple lost 3.2%, touching a five-month low.
- Solana also experienced notable losses.
Traders are increasingly risk-averse, reflecting concerns about the global economy and recession warnings. The total crypto market cap shrank by 9%, dropping from over $3 trillion to $2.4 trillion.
Technical Outlook: Bitcoin Struggles Near Key Levels
Bitcoin is currently testing critical support near $75,300. Resistance lies between $77,600 and $81,200. Analysts believe if Bitcoin breaks below support, further losses are possible.
Despite short-term weakness, some analysts see potential for a long-term recovery—especially if economic conditions stabilize. Liquidations in the past 24 hours hit $1.42 billion, with most losses coming from long positions.
Saylor Remains Optimistic Despite Massive Losses
Michael Saylor remains confident in Bitcoin’s future. He continues to describe it as “digital gold,” and expects a rebound in the long run. The company increased its Bitcoin holdings by 133% in recent months.
However, if prices fall further, the company might need to sell part of its holdings to meet liquidity needs.
Traders React: Patience Over Panic
Well-known trader Capo and others urge caution. They advise traders not to sell at current lows. Market bottoms often form during periods of extreme fear. Many believe staying in the market may prove wise in the long run.
Some wealthy crypto investors are focusing on “survival”, expecting stimulus to return eventually and reignite the market.
Volatility and Uncertainty Ahead
Cryptocurrencies face continued volatility driven by global events. Bitcoin’s future will likely remain uncertain as economic risks unfold. Traders are bracing for more instability, while holding on to the hope of a rebound.
