Bitcoin (BTC) Price Drops After U.S. President Donald Trump Announces New Trade Policy

The digital asset fell to $83,421 as investors reacted to news of comprehensive tariffs that sparked concerns about global trade tensions.

The world's largest cryptocurrency, Bitcoin fell on Thursday as investors reacted to U.S. President Donald Trump's recent trade policy announcements.

The digital asset slid to $83,421 by 03:33 ET (07:33 GMT).

Earlier this week, President Trump announced a sweeping overhaul of U.S. trade policy. The plan includes a 10% universal tariff on all imported goods, beginning on April 5, 2025.

The policy also features reciprocal tariffs targeting specific nations that erect trade barriers against U.S. products. These additional tariffs are set to take effect on April 9, 2025.

The new policy subjects China to a combined tariff of 54%, including a new 34% surcharge. Other countries facing steep tariffs are Japan (24%), the European Union (20%), India (26%), and Vietnam (46%). A 25% tariff on foreign-made automobiles and key auto parts will take effect on April 3, 2025.

🚨 @POTUS signs an Executive Order instituting reciprocal tariffs on countries throughout the world.

It's LIBERATION DAY in America! pic.twitter.com/p7UnfE617B

— Rapid Response 47 (@RapidResponse47) April 2, 2025

These developments have heightened investor concerns about a potential global trade war. The news triggered a broader risk-off sentiment across financial markets worldwide.

Major U.S. stock index futures plunged in early Asian trading hours on Thursday. Most Asian stock indices also tumbled in response to the tariff announcement.

Bitcoin, which is sometimes described as "digital gold," has benefited from economic uncertainty in the past. But its recent price action shows that it remains closely tied to broader risk appetite in the markets.

In risk-off environments, investors typically move away from riskier assets like cryptocurrencies. Many turn instead to traditional safe-haven assets such as gold, which hit record highs in Asian trading on Friday.

Shares of crypto-related companies followed Bitcoin's downward trend. Coinbase Global Inc shares dropped 7.5% in extended trading on Wednesday.

Bitcoin miners were also affected, with Marathon Digital falling 7.3% and Riot Platforms sliding 7%. Shares of Strategy (formerly MicroStrategy) fell 4.6% after the bell.

Meanwhile, the velocity of Bitcoin dropped to a 5-month low last week. This metric measures the speed at which crypto is circulating, offering insights into investor behavior.

As velocity decreases, it usually leads to slower price growth, which BTC has been experiencing lately. The reduced velocity signals a shift in investor sentiment, with hesitation among market participants contributing to Bitcoin's sluggish recovery.

Despite short-term caution, mid-term holders (those holding for 3-6 months) have seen increased wealth during this period. Many of these investors are transitioning into long-term holders, showing strong conviction even during market uncertainty.

Spending from this group has reached its lowest levels since mid-2021. This suggests that long-term holders are less likely to sell during market downturns, potentially reducing overall selling pressure.

At the time of writing, Bitcoin’s price is trading at $83,403, still below the crucial $85,000 resistance level. Earlier this week, Bitcoin had surged to $88,500 before declining after Trump’s tariff announcement.

For Bitcoin to recover recent losses, it must first reclaim $85,000 as support. A confirmed recovery would be marked by Bitcoin pushing past $89,800, potentially opening a path toward higher levels.

If Bitcoin fails to breach $85,000 and circulation remains low, its price could fall back to the next key support level at $80,301. Such a decline would invalidate the bullish outlook and could lead to further consolidation in the short term.

Most altcoins followed Bitcoin's downward trend on Thursday. The second-largest cryptocurrency, Ethereum fell 1.2% to $1,832.57. XRP edged 0.2% lower to $2.0687, while Solana slid 3.2%.

Among meme tokens, Dogecoin lost 1%, and the $TRUMP token slumped over 7%.