How are Trump's tariffs impacting Bitcoin's price? Part II

Following President Trump's election win on November 5th, Bitcoin soared from $70,000 to a peak of $109,356 on his inauguration day, January 20th, 2025.

The Trump crypto boom: catalysts behind Bitcoin's rally

In an article published two weeks ago, we highlighted how Bitcoin benefited from a continuous stream of positive news over the past eighteen months, including:

• Approval of the first Bitcoin ETF by the SEC, attracting retail and institutional investors
• Trump's pro-crypto actions, including replacing SEC Chair Gary Gensler with crypto advocate Paul Aitkins
• Announcement of plans for a "US stockpile" of Bitcoin
• Appointment of David Sacks as the first crypto czar in the administration
• Trump's family involvement in launching World Liberty Financial, a crypto venture
• Support from the Federal Reserve's 100bp rate cuts late last year, which boosted risk sentiment

Tariffs and economic concerns trigger widespread selloff

However, following a slew of tariff announcements and a concerning run of soft US economic data, risk sentiment rapidly fell apart at the seams. Consequently, Bitcoin has plummeted nearly 30% from its record high to a low of $76,600 overnight, far exceeding the US Tech 100's 13.65% drop from its peak.

Bybit exchange hack compounds crypto market fears

Bitcoin's decline below $90,000 was exacerbated by a $1.5 billion theft by North Korean hackers from the Bybit crypto exchange, the largest heist in the industry's history.

Bybit's CEO reassured clients that the exchange has secured bridging loans to cover the loss until the stolen assets are recovered. However, as time passes, the likelihood of recovery diminishes. Reports earlier this week indicate that the North Korean hackers have already liquidated $300 million, meaning the full amount is unlikely to ever be recovered.

Geopolitical developments and monetary policy outlook

Looking forward, the unpredictable flow of tariff policy will continue to play a significant role in shaping Bitcoin's trajectory alongside broader risk sentiment.

Evidence of the impact of even a slight improvement in risk sentiment was evident overnight as Bitcoin bounced back from a four-month low of $76,600 after the US agreed to resume military aid and intelligence sharing with Ukraine, following talks in Saudi Arabia where Kyiv expressed readiness to accept a 30-day ceasefire with Russia.

Additionally, should risk sentiment improve, Bitcoin also stands to benefit from heightened expectations of a more aggressive cycle of Fed rate cuts, with a cumulative 75bp of Fed rate cuts priced in for this year, up from 31bp just a month ago.

Bitcoin technical analysis

Technically, our view has been that Bitcoin struck a medium-term (Wave V – Elliott Wave) high at $109,356 in January and that a corrective pullback is underway.

Last night, the pullback extended into the upper bound of strong medium-term support in the $75,000/$65,000 zone, based on previous highs from March 2024, November 2021, and April 2021, before reversing higher by the close. This movement left a potential downside loss of momentum candle.

Moving forward, a sustained move above the 200-day moving average at $83,545, followed by a sustained break above trend channel resistance at $93,000/$95,000, would boost confidence that the correction ended at the recent $76,600 low, signalling a resumption of the uptrend with a potential retest of the $109,356 high. Until then, allow the correction to play out.

Bitcoin daily chart

• _{Source: TradingView. The figures stated are as of 12 March 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}