Will BTC Plummet to $71K or Bounce Back?

Bitcoin’s journey continues to resemble a wild amusement park ride, and the latest twist comes courtesy of President Trump’s sweeping trade tariffs. With Bitcoin currently trading around $82,357, fresh analysis by Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriole Investments, warns that these tariffs could force the crypto giant into “very high risk” territory—potentially sending it hurtling down to 71,000. Strap in, because the road ahead appears bumpy.

Tariff Turbulence and Market Mayhem

The saga began on April 2, when President Trump announced worldwide reciprocal trade tariffs. Bitcoin reacted dramatically, falling as much as 8.5% in one day while the S&P 500, in a surprising contrast, managed to close 0.7% higher. According to Edwards’ analysis, these “higher than expected” tariffs have injected an unsettling dose of uncertainty into the U.S. business outlook—a sentiment echoed by the Philadelphia Fed Business Outlook Survey (BOS). In fact, BOS ratings have dipped below 15 for the first time since early 2024, a reading reminiscent of market conditions last seen in 2000, 2008, and 2022.

The impact is clear: as business confidence wanes, Bitcoin’s price is being pressured downward. Edwards noted, “If tariffs climb even higher than expected, the risk of Bitcoin falling to the $71K zone increases dramatically.” This level is crucial; a breach here could trigger a major sell-off, although there’s also speculation that a dip into the $71K range might eventually spark a sizable bounce.

Support and Resistance

While the market now flickers between hope and panic, technical indicators add more drama to this unfolding saga. According to Capriole’s market update, a key level on the upside sits at $91,000. Edwards argues that “all else equal, a daily close above $91K would be a strong bullish reclaim signal.” But for now, Bitcoin’s journey seems perilously balanced. Should the downward pressure persist, experts forecast that the crypto king could slide through its critical $80,000 support level and edge closer to $76,741—a grim prospect that has sent shivers down investors’ spines.

Adding to the tension, Bitcoin’s price initially surged to $88,500 earlier before retreating back to roughly $82,876. In the aftermath, slight recoveries were observed; Bitcoin managed a modest rebound of 0.8% to $83,205, and Ether, which dropped over 6% from $1,934 to $1,797 after tariffs hit, clawed back 1.2% to settle at $1,810. Yet these recoveries, while welcome, do little to ease the overall bearish sentiment fostered by uncertainty on Wall Street.

Global Responses and Broader Market Ripples

The impact of these tariffs isn’t confined to just the crypto arena. The S&P 500 suffered huge blows—trading resource The Kobeissi Letter revealed that the index erased over $2 trillion in market cap, working out to nearly 125 billion per minute. This spectacular wipeout contrasts sharply with the modest but volatile performance of Bitcoin and other digital assets.

Industry voices are divided. Rachael Lucas, a crypto analyst at BTC Markets, observed that the initial surge in trading volume—up 46% on their platform as local traders rushed to reposition—was a classic case of “uncertainty relief.” However, once the full details of the tariff escalations, including rates of 10% on nearly all trading partners and even higher rates for some (with China at 34%, the European Union at 20%, and Japan at 24%), became clear, panic selling kicked in. Lucas warned that if retaliatory tariffs from regions like China or the EU are magnified, this could trigger another round of panic selling.

Meanwhile, U.S. Treasury Secretary Scott Bessent tried to calm international markets in an April 2 Bloomberg interview, urging U.S. trading partners to avoid adding further levies. Bessent suggested that the current tariffs might actually serve as a "ceiling" to market instability, providing much-needed certainty—a cue that when speculation recedes, institutional investors might seize the chance to capitalize on compressed valuations.

Related news: Hayes Predicts 110K Before a Dip to 76.5K for BTC

Volatility and Uncertainty Reign

Even as the crypto community grapples with extreme fear—evidenced by the Crypto Fear & Greed Index dropping to a score of 25—there remains a glimmer of cautious optimism. Market observer David Hernandez, a crypto investment specialist at 21Shares, noted that while the tariff rates were slightly higher than expected, the clarity the announcement brought could ultimately benefit the market in the long term.

In this tumultuous climate, the outlook for Bitcoin hangs in the balance. If it can break above resistance levels, like the critical $91K mark, a bullish turnaround might be imminent. Failing that, an extended period of sell-offs could push Bitcoin down toward 71K, where a significant bounce-back might eventually materialize. Investors are therefore advised to remain nimble, keeping a close watch on both macroeconomic signals and technical indicators.

FAQs

What does a Death Cross mean for Bitcoin?

• A Death Cross typically refers to a situation where the 50-day moving average falls below the 200-day moving average, signaling potential major price corrections.

Why could Bitcoin drop to $71K?

• The forecast is based on increased pressure from U.S. trade tariffs that have created a high-risk environment. If these tariffs worsen, experts believe Bitcoin could be forced down to around $71K.

How do trade tariffs affect cryptocurrencies?

• Trade tariffs often dampen business confidence and global liquidity, which in turn can lead to reduced investor confidence and downward pressure on asset prices, including cryptocurrencies.

What is the significance of the $91K level?

• A daily close above $91K is seen as a bullish signal, potentially marking a reversal in the current bearish momentum in Bitcoin’s price trend.

What are the potential ripple effects on other markets?

• The tariffs are causing significant volatility not only in crypto markets but also in traditional stock indices like the S&P 500, which experienced a dramatic loss in market capitalization.

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