Bitcoin (BTC) Market Update: Trade War Volatility, Institutional Dynamics, and Market Structure

Bitcoin trades at $98,800, down 2.6% as markets digest the complex implications of Trump's multi-front trade policy.

Bitcoin price experienced significant volatility during the session as markets reacted to the latest trade war developments. The cryptocurrency initially plummeted to $90,700 following tariff announcements on Mexico and Canada. However, the news of their postponement triggered a swift recovery, pushing the price to a high of $102,500. Subsequently, the market reversed course and declined again as traders assessed the implications of Chinese tariff implementation.

Institutions are pivoting towards Bitcoin

The cryptocurrency market displayed sensitivity to geopolitical shifts with a rollercoaster trading session. Bitcoin’s swift recovery from $90,700 to $102,500 following the Mexico/Canada tariff postponement highlighted the market’s responsiveness to policy changes. On the other hand, the subsequent decline on Chinese tariff news underscores the asset’s continued correlation with broader risk sentiment.

Bitcoin price surged to $102,500 on news of Mexico/Canada tariff postponement

A notable development is Bitcoin’s market dominance surging above 60% - the highest since March 2021 - as traders are seeking refuge in the largest cryptocurrency amid broader market turbulence. In comparison, smaller tokens faced steeper declines.

Trump's sovereign wealth fund initiative sparks Bitcoin speculation

Trump's executive order to create a US sovereign wealth fund has sparked speculation about potential Bitcoin inclusion. While Treasury Secretary Scott Bessent and Commerce Secretary nominee Howard Lutnick, both known for their crypto-friendly stances, will lead the initiative, the fund's actual cryptocurrency strategy remains uncertain.

Market structure analysis: leverage, Bitcoin ETFs

Leveraged positions faced significant pressure, particularly in the Ethereum market, where traders were caught off guard by a 27% intraday plunge before a substantial recovery. The episode highlights the continued prevalence of leverage in crypto markets despite increasing institutional participation. This paired with outflows from Bitcoin ETFs.

Bitcoin price technical analysis: Fib levels, moving averages

Bitcoin (D1 Interval)

Bitcoin is trading below the 61.8% Fibonacci retracement level. The first resistance is set at the 78.6% Fibonacci retracement level, a zone where breakouts have often led to corrections and trend reversals. Bears, on the other hand, will target the 38.2% Fibonacci retracement level, which has acted as support since November. If successful, a retest of yesterday's low at $90,700 could be in play. The RSI is showing signs of bearish divergence, while the MACD is tightening.