Bitcoin dropped almost 3% to $83,200, testing the 200-day average. Despite President Trump's recent cryptocurrency-related comments, attention has switched to the economic implications of the ongoing trade war and the Federal Reserve's dovish position on interest rates. Macroeconomic concerns, primarily tariff-related, are affecting risk assets.
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| Bitcoin drops to 3% |
Bitcoin Drops 3% Amid Fears of Trump's Threats to Crypto
As President Donald Trump's recent remarks on cryptocurrency were overshadowed by macroeconomic concerns, bears of Bitcoin (BTC) attempted to break through critical support on Sunday, continuing a three-day losing run. According to CoinDesk and TradingView statistics, the top cryptocurrency by market value dropped more than 3% to $83,200, testing the 200-day simple moving average (SMA). Since reaching highs above $92,800 on Thursday, prices have decreased by more than 10%.
The latest decrease occurs as trade tensions between the United States and China are expected to rise on Monday. In response to President Donald Trump's recent tariff increase on Chinese imports, Beijing will levy taxes on select agricultural items from the United States. The trade battle has created enormous uncertainty in the market and among policymakers.
Trump and Cryptocurrencies Conflict
Jerome Powell, the chairman of the Federal Reserve, reiterated on Friday that the central bank will continue to be cautious about interest rates while evaluating the effects of President Donald Trump's policy changes on the economy. Following a weak nonfarm payrolls data in the United States and forecasts of at least three rate reduction by the Fed this year, the remarks were made.
Observers claim that these events, together with recessionary bond market indications, are drawing attention away from Trump's recent declaration of a strategic Bitcoin holding. "In just a few hours, Bitcoin dropped 4% from $90,000 to less than $87,000, despite the extremely encouraging news. The analytics company IntoTheBlock stated in its weekly message to subscribers on Friday that "it seems focus on Trump's crypto-related actions are increasingly secondary as tariff war fears accelerate."
The business stated that macro concerns, primarily tariff-related, have been pushing markets lower, citing a strengthening positive correlation between bitcoin, ether, and US stocks. "Further actions like Trump stating he's not even looking at the stock market, and his administration targeting lower long-term interest rates instead, suggest that investor expectations of a Trump bull market may have been too eager," according to the organization.
According to the Saturday edition of Crypto Is Macro Now, author Noelle Acheson, the gloomy price action of Bitcoin following the disclosure of the strategic stockpile "underscores how macro concerns still weigh heavy on crypto assets."
According to the data, the price bounced after buyers intervened below the 200-day SMA on February 28 and March 2. This level will probably be watched by the market to see if traders repeat the same move.