Bitcoin Drops Below $93K Amid Potential Trade Conflicts, But Analysts See Long-Term Upside
In Brief
Bitcoin dropped below $93,000 amid concerns over US trade tariffs and large-scale liquidations, but analysts predict a potential short-term rebound and long-term strength driven by a weaker US dollar.
Price of decentralized cryptocurrency Bitcoin (BTC), has dropped below the $93,000 mark recorded earlier this morning. However, it has shown a slight recovery and is currently trading at $93,997, reflecting a decline of approximately 6.32% over the past 24 hours. During this period, Bitcoin’s lowest and highest values were $92,584 and $100,262, respectively.
Data from Coinglass indicates that more than 450,000 traders faced liquidations in the last 24 hours, with total liquidations amounting to $1.79 billion. Long positions accounted for roughly $1.57 billion of this total, while short liquidations reached $219 million, coinciding with the price decline.
Additionally, the overall cryptocurrency market capitalization has decreased by around 9.93%, bringing its total value to $3.06 trillion. However, despite increased sell-offs and liquidations, the total market trading volume has surged by 175.63% to $301 billion, according to CoinMarketCap data.
The cryptocurrency market, including Bitcoin and various altcoins, experienced turbulence as concerns over potential trade conflicts resurfaced following former US President Donald Trump‘s announcement of new import tariffs. The tariffs, unveiled on Saturday, include a 25% levy on imported goods from Canada and Mexico, along with a 10% tariff on Canadian energy and Chinese imports. These measures, set to take effect on Tuesday, have reignited inflationary fears, as higher tariffs could drive up costs, adding pressure on financial markets and risk assets, including cryptocurrencies.
However, despite short-term volatility, Jeff Park, head of alpha strategies at cryptocurrency index fund manager Bitwise, suggests that these tariffs could support Bitcoin’s long-term growth. He explains that a weaker US dollar in global currency markets, coupled with lower yields on US government securities, may enhance Bitcoin’s appeal as an alternative asset.
Market Rebound Likely As Experts Weigh Bitcoin’s Outlook Amid Trade Tensions
Meanwhile, experts suggest that a market rebound could take place in the coming days.
Cryptocurrency analyst Ansem expects a temporary recovery, suggesting that a relief bounce is likely in the next few days, providing an opportunity for investors to exit positions. However, he cautioned that this outlook could change if discussions between Donald Trump, Canada, and Mexico take a negative turn. Ansem also noted that while Bitcoin and overall market sentiment remain stable for now, many altcoins have broken key technical structures, which may take time to recover.
Meanwhile, Daniel Yan, co-founder of cryptocurrency service provider Matrixport, pointed out that the market downturn was characteristic of a typical low-liquidity Monday, influenced by algorithmic trading strategies (CTAs) reacting to price movements. He noted that the Asian market has recently shown increased sensitivity to negative news and limited independent market reactions.
He also emphasized that the newly announced tariffs are unlikely to cause a considerable economic or inflationary shock in the US, suggesting that the market is likely to recover soon.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
