Is Bitcoin price going to crash again?

Bitcoin (BTC) is up 16% from the four-month low of $76,600 to reach $88,700 on March 24. The price has since hovered around $85,000 on April 2.

The latest rejection from the $85,500 resistance level raises questions about whether BTC price could drop further over the next few days.

BTC/USD daily chart. Source: Cointelegraph/TradingView

Trump’s tariffs could drive Bitcoin prices lower?

April 2 marks what US President Donald Trump dubbed “Liberation Day,” unveiling sweeping reciprocal tariffs targeting imports from numerous countries. Market participants are concerned this might trigger another sell-off in cryptocurrencies, pushing prices lower.

Key takeaways:

The proposed tariffs include a 25% levy on auto imports and broad duties on goods from nations like China, Canada, and Mexico.

While these measures aim to reduce the US trade deficit and bolster domestic manufacturing, they could result in inflation and a risk-off mood.

This could spook investors in the global market, with risk-on assets like Bitcoin bearing most of the brunt.

For instance, when Trump imposed tariffs on Canada, Mexico, and China in early March, Bitcoin dropped from $105,000 to $92,000 overnight.

Commenting on the current risk-asset landscape, trading firm QCP Capital emphasized the effects of Trump’s trade tariffs release today, especially as investors brace for retaliatory measures from affected nations.

“The US seems increasingly intent on isolating itself in pursuit of more favorable trading terms,” the firm said in a Telegram note to investors, adding that the targeted countries are “not likely to concede.”

QCP also pointed out that “rather than fracturing under pressure,” global players appear to be closing ranks, particularly after a meeting by officials from China, Japan and Korea to explore deeper regional trade cooperation.

“In the short term, we expect all risk assets to remain under pressure.”