Urgent Bitcoin Price Analysis: Will Trump’s Tariffs Trigger a Terrifying Crash?

Hold onto your hats, crypto enthusiasts! Bitcoin recently flirted with $88,700, but now it’s dancing just below $87,000. This dip has everyone wondering: Is a Bitcoin price crash on the horizon again? Let’s dive into the market analysis and see what’s brewing in the world of BTC.

Bitcoin Price Analysis: Struggling to Stay Above $88,000

Bitcoin’s recent struggle to maintain its position above $88,000 has sparked concerns. After touching $88,700, a correction brought the price down to under $87,000 by March 27th. This rejection at the $88,000 resistance level has raised eyebrows and fueled speculation about a potential further decline in the coming days. Could this be a minor pullback, or are we looking at something more significant?

BTC/USD four-hour chart. Source: Crypto News Insights/TradingView

Will Trump Tariffs on Autos Cause a Crypto Price Crash?

Adding fuel to the fire, former President Trump’s announcement of a 25% tariff on imported cars and light trucks has sent ripples through the market. Set to take effect on April 3rd, these tariffs have market watchers worried about a potential sell-off in cryptocurrencies. Remember when previous tariffs triggered a significant drop? Let’s revisit that.

Flashback: Tariff-Induced Bitcoin Dip

Earlier this year, when tariffs were imposed on Canada, Mexico, and China, Bitcoin experienced a dramatic overnight plunge. It fell from $105,000 to $92,000 before staging a partial recovery. The fear is that these broader auto tariffs could amplify that effect, especially as nations brace for retaliatory measures.

Expert Take: QCP Capital on Tariff Risks

Trading firm QCP Capital highlights the potential impact of Trump’s trade tariffs, warning of escalating trade tensions. They noted in a Telegram message that “any further retaliation from these target economies risks injecting a fresh wave of uncertainty into an already volatile global trade landscape.”

Interestingly, QCP also points out that market sentiment remains “subdued” despite positive catalysts like GME’s $1.3 billion capital raise, potentially earmarked for Bitcoin. The consistent inflow into spot BTC ETFs, totaling $944.9 million since March 11th, is the only clear positive signal. This divergence, as QCP notes, reveals a “bifurcated institutional conviction” in the market.

Crypto Market Demand: Is it Waning?

Adding to the bearish signals, market intelligence firm Glassnode indicates that crypto market demand for Bitcoin appears to be softening. This suggests a decrease in risk appetite among potential investors. Let’s break down what their on-chain data reveals.

Glassnode Insights: Demand Contraction

Glassnode’s recent on-chain report points to a “contraction in Bitcoin’s demand.” They measure this by analyzing the volume of realized profit and loss taken by investors, which provides insight into sell-side pressure in spot markets.

• Significant Drop: Bitcoin’s combined realized profit and loss volumes have plummeted by 85% since the peak above $109,000.
• Current Levels: This metric is now back to levels seen during the 2024 accumulation phase between $50,000 and $70,000.
• Demand Profile: This suggests a similar, weaker demand profile compared to that earlier accumulation period.

Bitcoin: Absolute realized profit and realized loss. Source: Glassnode

Capital Inflows and Profit-Taking Dynamics

Sustainable bull markets thrive on consistent inflows of fresh capital from new investors. However, Glassnode’s data reveals a shift in the balance between long-term and short-term holder behavior.

• Neutral Zone: The difference between long-term holder (LTH) profit-taking and short-term holder (STH) loss realization has sharply declined since the $109,000 high.
• Stagnant Inflows: This has returned to a “neutral zone,” indicating that STH losses are now offsetting LTH profits.
• Weaker Demand: Glassnode suggests this points to “relative stagnation in new capital inflows, weaker demand-side forces, and a slowing but still meaningful volume of profit taking acting as resistance.”

Bitcoin: Difference between LTH realized profit and STH realized losses. Source: Glassnode

Silver Lining: Long-Term Holders Accumulating

Despite the concerning demand metrics, Glassnode offers a glimmer of hope. They conclude that while short-term holders are primarily realizing losses, Bitcoin long term holders are shifting back into accumulation mode. This accumulation by long-term holders could be a precursor to a Bitcoin recovery. Glassnode anticipates that “their aggregate supply to grow in the coming weeks and months as a result.”

Key Bitcoin Levels to Watch to Avoid a Price Crash

Traders are laser-focused on critical levels around the $88,000 mark. Here are the key Bitcoin price analysis levels to monitor closely:

• Downside Support:
• 200-day SMA: $85,500
• Major Support: $82,700
• Range Lows: $81,138 (March 18) and $76,600 (March 11) – Potential liquidity grab zone.
• Next Support Area: $72,200 – $74,500
• Fair Value Gap: Towards $70,000
• Upside Resistance:
• Resistance Zone: $88,700 – $92,000 (50-day and 100-day SMAs)
• Breakout Target: $100,000 and beyond (if resistance is overcome)
• 20-weekly EMA: $88,600 (Analyst Decode’s key level)
• 2025 Yearly Open: $93,300 (Material Indicators’ Keith Alan’s reclaim level for bull cycle continuation)

BTC/USD daily chart. Source: Crypto News Insights/TradingView

The Verdict: Will Bitcoin Crash Again?

The current market landscape for Bitcoin is a mixed bag. Trump’s tariffs introduce external economic uncertainty, while on-chain data suggests softening demand. However, the accumulation by long-term holders offers a potential counter-narrative. Keep a close watch on the key levels outlined above. A break below $82,000 could signal further downside, while a sustained move above $92,000 could reignite bullish momentum.

Remember, this is not investment advice. The crypto market is volatile, and thorough research is crucial before making any investment decisions. Stay informed, stay vigilant, and navigate these uncertain waters wisely!

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