Bitcoin (BTC) Price Breaks Below 50-Week EMA, Increasing Risk of Drop to $45K

US President Donald Trump's April 2 announcement of a 10% universal import tariff triggered immediate market reactions, increasing global economic tensions and impacting both traditional and crypto markets.

U.S. President Donald Trump’s April 2 announcement of a 10% universal import tariff has sparked immediate reactions in the market, heightening global economic tensions and impacting both traditional and crypto markets.

As reported by CoinChapter previously, the new tariffs, part of an executive order signed by President Trump, place a 10% tariff on all goods imported from China and 25% on U.S. metal imports.

China will face tariffs as high as 54% under the new policy, which the administration calls “Liberation Day.” The move is meant to help U.S. industries but may worsen the ongoing trade war and slow down the global economy.

S&P 500 and Nasdaq 100 futures slid over 4% on Tuesday, while Dow Jones futures tumbled more than 1,000 points. Bitcoin briefly surged to $87,000 on Tuesday before pulling back. The world’s leading cryptocurrency is now trading around $83,000 and faces pressure from rising macroeconomic uncertainty.

Bitcoin Is Now At Risk Of Drop As Key Support And RSI Turn Bearish

Bitcoin is currently trading near its 50-week Exponential Moving Average (EMA) at $76,619. This level has acted as support since early 2023. The cryptocurrency is now trading at $83,644, slightly above this crucial zone.

If Bitcoin's price closes below the 50-week EMA, it could continue moving lower toward the 200-week EMA, which is located at $45,623. Such a decline would amount to approximately 40% from the current price levels.

As evident from the chart, Bitcoin has broken through a rising trendline that originated in late 2022. This breakout suggests a weakening in the price structure.

In past cycles, when this type of support was lost, Bitcoin often dropped to the 200-week EMA before finding support again. At least, that’s what happened in the 2015 cycle.

The Relative Strength Index (RSI) is now at 47.79, which is below the neutral 50 level. This reading indicates that momentum is shifting in favor of bears.

The RSI's moving average is still at 57.64, showing a clear shift in the RSI. If the RSI manages to stay below the 50 level, it could continue putting pressure on the price to move lower.

President Trump's Tariffs On China Boost Chances Of US Recession

President Donald Trump's imposition of sweeping tariffs has heightened concerns about a potential U.S. recession.

Prediction platforms like Polymarket and Kalshi now reflect a greater-than-50% probability of an economic downturn this year, a notable escalation from less than 20% at the year's beginning.

Analysts are divided on the implications of these tariffs.

Ed Yardeni of Yardeni Research suggests that a recession could ultimately benefit the U.S. market despite concerns over low growth and a $33 trillion risk to global trade. He advises global portfolio managers to prioritize U.S. equities, highlighting factors like full employment and energy independence.

"The U.S. is in the best shape to emerge quickly and strongly from any global downturn, rendering it ideal for global investors to concentrate their portfolio on U.S. equities during this period," Yardeni said.

However, economist Stephen Miller, co-founder of Node, estimates a better-than-50% chance of a global recession in 2025, tying it to the prospect of high inflation and low growth, also known as stagflation, similar to the 1970s.

"I think there's a better-than-50% chance we'll be in a global recession by 2025," Miller said.

These emerging recession signals bode poorly for crypto in the short term as investors typically pull out of riskier assets, including Bitcoin, during times of economic uncertainty.