Bitcoin (BTCUSD) Retreats Below $95,000 on U.S. Tariffs; Double Top Pattern Forms

Bitcoin (BTCUSD) retreated below $95,000 on Sunday over concerns about the potential impacts of U.S. tariffs imposed on products coming from Canada

Bitcoin (BTCUSD) fell below $95,000 on Sunday amid concerns over the potential impact of U.S. tariffs on goods from Canada, Mexico and China.

The sharp drop in the price of bitcoin comes after President Donald Trump announced on Saturday that the U.S. will impose 25% tariffs on most Mexican and Canadian imports, and 10% on all goods from China, starting on Tuesday. Investors view tariffs as inflationary, which could prevent the Fed from cutting rates this year, putting downward pressure on non-interest-bearing assets such as bitcoin.

Bitcoin has fallen about 15% from its record high last month, marking its third consecutive down day on Sunday and hitting a three-week low. However, it still trades 35% higher since the early-November U.S. election on expectations of a possible strategic bitcoin reserve and a more favorable regulatory outlook under a crypto-friendly White House and Congress.

Below, we take a closer look at bitcoin's chart and apply technical analysis to identify key price levels to watch for the coming sessions.

Potential Double Top

Bitcoin's price formed two peaks around the same level between December and January, potentially forming a double top, a classic chart pattern that signals a downside reversal.

Moreover, while the cryptocurrency made a slightly higher high last month, the relative strength index (RSI) made a relatively shallower peak to create a bearish divergence between the price and indicator, pointing to waning buying momentum.

Let’s identify three crucial levels where bitcoin’s price may attract support and also point out a key overhead area to watch during possible upswings.

Crucial Support Levels To Monitor

The first level to monitor sits around $92,000. This area provides a confluence of support from an uptrend line stretching back to last year’s September low and a range of similar price points on the chart between November and January. The price fell below this key level late on Sunday, but has since largely reclaimed the area.

Further downside could see a decline to the $87,000 level, a location where the digital currency may encounter support near the bottom of a pennant pattern that formed on the chart following the cryptocurrency’s initial post-election pop.

A decisive breakdown below this level would set the stage for a larger drop to around $74,000. Investors who favor buy-and-hold strategies may look for entry points in this region near the prominent March 2024 high, which also closely aligns with the late-October peak.

Key Overhead Area To Watch

During upswings, investors should keep a close eye on the $106,000 area. This location is likely to attract significant attention near the December and January peaks. A convincing volume-backed breakout above this key technical level would invalidate a double top pattern and could see bitcoin continue its longer-term uptrend.

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As of the date this article was written, the author does not own any of the above securities.