Bitcoin (BTC) Price Drops Below $75K as Trade Tensions Crater Financial Markets

Roughly 10 weeks ago, CoinDesk discussed a double top bearish reversal pattern in bitcoin (BTC), warning of a sell-off to $75000

As discussed in January, the BTC sell-off could run out of steam between $70K and $75K.

On Monday, the price dropped below that level as escalating trade tensions cratered financial markets, sending Dow Jones Industrial Average futures lower by a whopping 900 points.

Roughly 10 weeks ago, CoinDesk discussed a double top bearish reversal pattern in bitcoin (BTC), warning of a sell-off to $75,000 in a move typical of a bull-market pull back.

According to technical analysis theory, a double top pattern signals a reversal of an up-trend. It's formed when an asset reaches the same resistance level three times, with the middle attempt showing a higher high.

BTC had touched the $70K resistance on August 18 and again on August 27, while the price dropped to a low of $60K on September 1. A recovery move saw BTC prices testing the $70K on Monday, signaling a double top pattern.

Also, the Australian dollar (AUD), a commodity currency particularly vulnerable to Trump-led global trade tensions, is offering hope to crypto bulls.

The AUD/USD pair has recovered to 0.6011 after dropping as low as 0.5930 earlier Monday, according to data source TradingView. The pair was the worst hit on Friday, falling over 4%, a big move for a national currency.

When trade tensions escalate, currencies of nations involved in the tussle typically react quickly due to expected changes in trade balances, economic conditions and interest-rate expectations. The AUD is one such currency. As the home currency of commodity exporter Australia, it's seen as a proxy for China, one of the country's biggest customers. So, the sharp recovery in the AUD could be a sign of tariffs-led sell-off reaching climax.

That said, bottom fishing in a falling market is akin to catching a falling knife, a risky strategy.