Bitcoin is commencing the week at approximately $81,800, reflecting a 1.98% decline in the last 24 hours and continuing a downward trend that has resulted in over a 7% drop from its local peak of $88,400 on March 25.
This ongoing decrease has led to around $220 million in liquidated crypto positions, extending Bitcoin’s sequence of lower lows to seven consecutive days.
The downturn aligns with significant losses in the wider digital asset market. The total global crypto market capitalization has fallen to $2.65 trillion, a decrease of 1.77% over the same 24-hour period, while daily trading volume has dipped by 1.4% to $57 billion.
Macroeconomic Concerns and Tariff Uncertainty Undermine Market Confidence
Growing apprehension ahead of Donald Trump’s “Liberation Day” on April 2, when he is anticipated to announce extensive “reciprocal tariffs,” is putting additional pressure on both crypto and traditional financial markets. The expectation of aggressive trade actions has sparked a dereferencing trend across spot markets, diminishing demand and increasing investor caution.
A number of adverse macroeconomic indicators are worsening the situation. Last week’s Core PCE data suggested inflation at higher-than-expected levels, while consumer confidence has dropped to its lowest point in more than a decade. Additionally, Goldman Sachs raised its recession prediction from 20% to 35%, due to heightened geopolitical and economic risks.
Bitcoin’s drop has mirrored declines in equity markets, highlighting its correlation with traditional risk assets. The S&P 500 has fallen by more than 6% this month, while the Nasdaq and Dow Jones Industrial Average have decreased by 9% and 4.7%, respectively.
Bitcoin has experienced a 13% decline in the first quarter of 2025, marking its poorest quarterly performance in two cycles. This dip occurs as gold reaches an all-time high of over $3,087, suggesting a clear separation between asset behaviors.
‘Liberation Day’ Anticipated to Challenge Market Resilience
The forthcoming tariff announcement is set to serve as a critical turning point for both the crypto and broader financial markets. Trump’s “Liberation Day” on April 2 is expected to introduce tariffs aimed at reducing U.S. reliance on foreign imports, with targets including the European Union, South Korea, Brazil, and India, as reported by CNBC.
Goldman Sachs forecasts that these tariffs could lead to increased inflation and unemployment, stunting economic growth. Their projections indicate a potential rise in tariffs by 15 percentage points, though exemptions for certain products and countries might lower the actual increase to 9 percentage points. As detailed by Reuters, the immediate impact on the market will hinge on the extent and timing of tariff implementation, especially concerning any reciprocal actions from other countries.
If retaliation occurs, it could trigger a cycle of escalating trade restrictions, likely heightening market volatility. Analysts view the upcoming days as vital for evaluating investor sentiment resilience amid potential policy shocks and ongoing macroeconomic challenges.
Bitcoin Confronts Technical and Sentiment-Driven Challenges
Technical analysis of Bitcoin suggests further downside risk, with price movements approaching a crucial support level. The asset is at a threshold that, if breached, could expedite selling and pave the way for short-term bearish continuation.
Bitcoin has struggled to sustain its position within the purple price channel, reverting back to the green channel, which historically precedes the potential bottom channel for this cycle at $73,000.
Although some analysts speculate that Bitcoin may benefit in the long run from inflationary pressures instigated by tariffs, such hypotheses remain uncertain and detached from the current sell-off. At this moment, traders seem more inclined toward preserving capital amidst unclear macroeconomic signals and rising geopolitical risks.
