Bitcoin (BTC) is reminiscent of previous trends this week as tariff turmoil pushes BTC price movements closer to 2021 levels. The cryptocurrency is currently dropping support lines for its bull market, as a new “death cross” appears on the BTC/USD daily chart. The upcoming Consumer Price Index (CPI) week is largely overshadowed by US trade tariffs and their escalating global repercussions on the stock market. Both cryptocurrency and traditional finance market players are drawing parallels to the “Black Monday” crash of 1987 and the cross-market fallout of the COVID-19 pandemic. Many speculative investors in Bitcoin find themselves at a loss and may be increasingly inclined to panic sell. Market sentiment is virtually non-existent, with the traditional finance Fear & Greed Index hitting its lowest point ever recorded.
The current “death cross” situation for Bitcoin puts its previous highs from 2021 at risk. Data indicates that BTC could fall below its former all-time highs of March 2024. After dropping under $75,000 for the first time since November, BTC/USD is quickly revisiting forgotten support levels, including one at $69,000 that first emerged in 2021. This sudden plunge, which followed significant losses in the stock markets, has taken many by surprise.
As popular analyst Kevin Svenson noted on social media, “This could be BTC’s final opportunity to sustain its macro uptrend structure.” The 50-week exponential moving average (EMA) at roughly $77,000 is also among the support lines now broken. Trader CrypNuevo warned in an online discussion that a breach of that level would serve as a “short trigger” for him. He indicated that if price dips below that support but then recovers, that could initiate a long position aimed at pushing back towards $87,000.
The trading resource Material Indicators has identified a concerning “death cross” on daily timeframes, marking a bearish trend where the 50-day simple moving average (SMA) dips below the 200-day SMA. They advised followers to be alert to the momentum stemming from this development.
As the week progresses, US trade tariffs remain a hot topic across global financial markets. The ramifications of the tariffs introduced last week continue to pose challenges, escalating downward momentum in risk assets, especially with more tariffs expected on April 9. Commerce Secretary Howard Lutnick assured media outlets that the government is moving forward with these tariffs promptly. With fears building and panic spreading among traders and hedge funds alike, other volatility triggers this week, such as the impending US inflation data, are receiving little attention. The March Consumer Price Index (CPI) and Producer Price Index (PPI) reports are set to be released on April 10 and 11, respectively.
Federal Reserve Chair Jerome Powell previously remarked that while the tariffs would significantly impact inflation, accurately assessing those effects in advance is complex. Current attitudes suggest that the market expects a policy easing from the Fed to mitigate the effects of these tariffs. According to the latest data, forecasts now lean towards a 0.25% rate cut at the Federal Reserve’s upcoming meeting in May, moved up from earlier expectations of a June timeframe.
The outcomes of the tariffs could potentially mirror those of historical down markets, raising fears of a widespread crash akin to “Black Monday” in 1987. Recent trading behavior has displayed a rapid 10% dip over two consecutive days — a trend seen only three times before in history. Notably, the downturns in 1987 and 2020 marked market lows.
Many analysts contend that the current environment is teetering on the brink of a similarly chaotic scenario, with Michaël van de Poppe suggesting that we may endure a turbulent few weeks ahead and are testing the lows for Bitcoin, possibly dropping as low as $70K. He believes that an emergency rate cut from the Federal Reserve is the best course to manage the ongoing market bleed.
Additionally, trading loss reports for both Chinese and Japanese stocks surfaced during the week’s trading sessions, indicating a return of market volatility reminiscent of the early pandemic days. Market sentiment is being described as “polarized,” drawing notable comparisons to the chaos that ensued in March 2020.
As for Bitcoin, the short-term holders — those who bought within the last six months— are the investors most likely to sell off their positions. Their sensitivity to BTC price swings leads to exacerbated market reactions. Recent analytics show that this group is increasingly experiencing losses. The Spent Output Profit Ratio (SOPR) indicates that short-term investors are realizing losses as they sell off holdings.
The overall sentiment in traditional markets has plummeted, with record bearish readings. The Fear & Greed Index reflects this dark mood, which has dipped to a historic low of 4/100 — a level not seen even during major previous downturns. While cryptocurrencies are not immune, they seem to be weathering the storm slightly better, with a Crypto Fear & Greed Index reporting 23/100 as of April 7.
Amid the turmoil, some market observers are hinting that now might be a strategic time to “buy the dip,” although there are still many uncertainties ahead. The founder of a quantitative Bitcoin fund shared insights about the market’s present risk and observed that Bitcoin has shown relative strength worth noting. The potential for a significant rally off the eventual market bottom remains a topic of discussion, although caution is advised due to the prevailing uncertainties.
This content does not constitute investment advice or recommendations. Every investment and trading maneuver carries risks, and readers should conduct their independent research before making financial decisions.