Bitcoin had a rough start to the trading week. The price of Bitcoin (BTC) dropped to around $92,528, an 8% fall in just a few hours, according to CoinMarketCap data. It’s since bounced back a bit to $94,019 at the time of writing. But why the sudden dip?
Over the last 12 hours, about $300 billion in long positions (bets that prices will go up) were liquidated, based on data from CoinGlass. This means that a lot of people who were betting on Bitcoin’s price rising had to close their positions because prices fell instead.
So what caused this? Many believe it’s linked to a new trade war sparked by U.S. President Donald Trump, who slapped a 25% tariff on Canada and Mexico. Tariffs are taxes on imports, and they can affect international trade and markets. There’s skepticism about how effective these tariffs will be, with some experts calling it the “Dumbest Trade War in History.”
But here’s an interesting twist—Jeff Park from Bitwise, a financial services and asset management firm, thinks these tariffs might push Bitcoin prices higher in the long run. How? Well, tariffs could weaken the U.S. dollar in global markets, making it less valuable compared to other currencies. When that happens, people often look for alternatives to store their wealth—like Bitcoin.
Park even mentioned the possibility of a “Plaza Accord 2.0.” Back in 1985, a similar agreement helped weaken the U.S. dollar to adjust trade imbalances. If something like that happens again, it could mean more inflation and currency debasement worldwide, which could drive more people toward Bitcoin as a safe haven.
Just Before the Crash
Now, here’s where things get interesting. Just before the crash, CryptoQuant warned that Bitcoin’s price was at a critical moment. Their analysis pointed to a metric called the NVT Golden Cross, which compares Bitcoin’s price to its transaction volume. When the indicator’s blue line rises above 2, it signals that Bitcoin might be overpriced and at risk of a downturn. When it drops below -2, it’s often seen as a buying opportunity.
That warning turned out to be spot on. The indicator crossed the critical level, and hours later, Bitcoin’s price tumbled.
Now, what we are curious about though, with this indicator in play, can we expect a further downside if that becomes an important factor other than the tariffs?
We’re all watching closely as U.S. markets open later today. The big question—has Bitcoin found the bottom of this dip, or are deeper lows ahead? Stay tuned to HowToBuyBitcoin.org, and remember to stay calm during these wild swings!