Bitcoin (BTC) experienced a sharp pullback to $82k following US President Donald Trump’s announcement of new trade tariffs. These cover a huge number of countries in the world, and their implementation will have all kinds of consequences on the trade and financial market, not just crypto. 

Taking into account crypto’s already innate unpredictability, it’s no wonder why the Bitcoin price dropped, as the market’s reaction highlights growing investor concerns over macroeconomic shifts and their possible impact.

Trump’s proposed tariffs signal a more aggressive stance on global trade, which has historically created uncertainty in traditional financial markets. The ripple effect on Bitcoin and the broader crypto market suggests traders are shifting their positions in anticipation of economic changes that are bound to happen.

Key Support Eyed at $78k

Last week, Bitcoin’s price was hovering around $88k, but this drop raises questions about further downside potential. Some analysts are eyeing the $78k level as a critical support zone. In case the bearish momentum continues, the cryptocurrency could test this level before stabilizing or rebounding.

It’s worth noting that following Trump’s tariff announcement, the crypto industry experienced over $500 million in liquidations.

Looming Uncertainty

It’s always hard to predict an exact price drop or increase, but there is reasonable certainty that Trump’s tariff policies will trigger broader market sell-offs. High leverage in the crypto market increases the likelihood of excessive price movements, making liquidations a key factor in determining whether Bitcoin holds above $80k.

Adding to near-term uncertainty, the Chair of the Federal Reserve of the United States, Jerome Powell, is scheduled to give a speech on April 4th, which might influence the current state of the crypto market.

Hedge Narrative Tested by Macro Correlation

Bitcoin has been increasingly viewed as a hedge against inflation and macroeconomic instability. However, geopolitical events, including trade policies and interest rate shifts, will continue to play a big role in shaping short-term price action.

While a dip to $78k remains a possibility, long-term bullish sentiment in the crypto space remains strong, and it’s hard to believe that Bitcoin’s price will continue to drop. Still, it’s wise to be cautious. Trump’s tariffs surely won’t go unnoticed and other countries will likely retaliate, directly affecting the crypto industry.