Approximately 10 weeks prior, a discussion surfaced regarding a double top bearish reversal pattern for bitcoin (BTC), which raised concerns over a sell-off possibly reaching $75,000—a move often observed during bull-market corrections.
On Monday, the price fell underneath that threshold as increasing trade tensions adversely impacted financial markets, causing Dow Jones Industrial Average futures to tumble by an alarming 900 points. Based on technical analysis principles, the BTC sell-off may begin to stabilize within the $70K to $75K range, as noted earlier in January.
Additionally, the Australian dollar (AUD), a commodity currency particularly sensitive to global trade tensions, especially under Trump’s leadership, is providing a glimmer of hope for cryptocurrency enthusiasts. The AUD/USD exchange rate rebounded to 0.6011 after previously dipping to 0.5930 earlier on Monday, according to TradingView data. The pair experienced a significant drop on Friday, plummeting by more than 4%, which is substantial for a national currency.
Typically, when trade conflicts heighten, the currencies of the nations embroiled in these disputes respond rapidly due to anticipated shifts in trade balances, economic health, and interest-rate forecasts. The AUD fits this bill; as Australia is a commodity exporter, its currency is viewed as a proxy for China, one of its primary trading partners. Thus, the notable rebound in the AUD could signal that the sell-off driven by tariffs is reaching its peak.
That said, attempting to buy low in a declining market can be likened to trying to catch a falling knife, which is an inherently dangerous tactic.