Bitcoin’s price has plunged by over 5% in the last 24 hours, falling below $96,000 and sparking broader declines in the cryptocurrency market. The drop follows US President Donald Trump’s announcement of new tariffs on imports from Canada, Mexico, and China, raising concerns about a potential trade war.
Bitcoin’s Market Decline
Bitcoin, which had remained above the $100,000 mark since mid-January, dipped as low as $91,530 on 3 February before stabilising around $95,279 at the time of writing. The sudden downturn has led to increased volatility, with analysts warning of further declines if key support levels fail.
Impact of Trump’s Tariff Announcement
Trump’s decision to impose tariffs—25% on Mexican and Canadian goods and 10% on Chinese imports—has triggered a risk-off sentiment among investors. Many have shifted towards safer assets, leading to a sell-off in Bitcoin and other major cryptocurrencies.
BTC/USD daily chart. Source: TradingView
Market analysts suggest that fears of an escalating trade war have prompted a cross-asset portfolio rebalancing, with riskier investments such as Bitcoin suffering the most. Trading firm QCP Capital noted that market participants should brace for continued volatility as negotiations between the US, Canada, and Mexico unfold.
Mass Liquidations Deepen Market Losses
The price decline has triggered a wave of liquidations in the crypto derivatives market, intensifying downward pressure.
- Approximately $465 million worth of Bitcoin leverage positions have been liquidated in the past 24 hours.
- Long positions accounted for $389 million of these liquidations, compared to just $75 million in short positions.
- The cascading liquidations have further driven Bitcoin’s price lower, mirroring a similar event on 20 December 2024, when an 11% BTC drop led to $419 million in long positions being wiped out.
With more than $2.5 billion in leveraged positions erased, some analysts have described the current sell-off as one of the largest liquidation events in recent history.
Key Support Levels to Watch
Bitcoin’s recent decline has brought it close to a critical support level at the 100-day simple moving average (SMA), currently at $93,899.
Source: The White House
- If Bitcoin manages to hold above this level, it could attempt to reclaim the 50-day SMA at $99,000.
- The Relative Strength Index (RSI) currently stands at 38, nearing oversold conditions, suggesting a possible short-term recovery.
Popular trader Daan Crypto Trades predicts that Bitcoin’s price may fluctuate within a broad range of $90,000 to $108,000 in the coming days. However, if the lower support level is breached, further losses could be expected.
While the market remains on edge, traders are closely monitoring developments in US trade policies, which could play a crucial role in Bitcoin’s next move.
