TLDR
Bitcoin price dropped to $74,589.67 in the last 24 hours following U.S. imposing 104% tariffs on Chinese imports
Asian and Pacific stock markets fell by up to 6% in a single day as trade tensions escalated
Michael Saylor’s Strategy reported a $5.91 billion unrealized loss on its digital asset holdings
Short positions now make up 55% of all open interest, indicating bearish sentiment
Despite current decline, analyst PlanB suggests convergence of 200-week means could signal a potential bull market ahead
Bitcoin has taken a significant hit in the past 24 hours, with prices plunging below the $75,000 mark as global markets respond to escalating trade tensions. The cryptocurrency fell to a low of $74,589.67, marking one of its sharpest drops in recent weeks.
The downturn comes as the United States implemented a 104% tariff on Chinese imports, sparking fears of a global trade war. This move has sent shockwaves through financial markets worldwide, with Asian markets particularly hard hit.
Japan’s Nikkei 225 dropped nearly 4% at the open, with other Asian markets following suit. Australia, South Korea, and New Zealand all reported heavy losses, with Australian stocks opening 2% lower and erasing previous gains.
The negative sentiment wasn’t confined to Asian markets. U.S. stock indices also reversed course, with the S&P 500 falling 1.6% after an earlier gain of 4.1%. The Dow Jones Industrial Average dropped 0.8%, while the tech-heavy Nasdaq fell a steeper 2.1%.
Market Sentiment Turns Bearish
For the first time in weeks, Bitcoin’s long-short ratio has flipped, with short positions now accounting for 55% of all open interest. This shift indicates a growing bearish sentiment among traders, who are no longer betting on a quick rebound.
The sell-off has triggered a wave of liquidations in the crypto market. In just one day, nearly $400 million worth of leveraged long positions were wiped out as investors rushed to reduce exposure to riskier assets.
Adding to Bitcoin’s woes, Michael Saylor’s Strategy, the largest listed holder of Bitcoin, reported a $5.91 billion unrealized loss on its digital asset holdings. This disclosure is expected to result in Strategy recording a net loss for the first quarter of 2025.
The company also informed shareholders that it had neither sold any stock nor acquired additional Bitcoin since the end of Q1, despite recent price drops potentially offering buying opportunities. Following this announcement, Strategy’s shares fell sharply.
Potential Bull Market Signals
Despite the current downtrend, not all analysts are pessimistic about Bitcoin’s future. Quant analyst PlanB suggests that Bitcoin could be on the verge of entering a bull market based on technical indicators.
PlanB highlighted the convergence of two key measures – the 200-week arithmetic and 200-week geometric means – as a possible sign that Bitcoin may be primed for an uptrend. According to the analyst, when these two lines are close together on Bitcoin’s price chart, it often precedes a price rally.
The analyst pointed to previous instances in 2020 and 2017 when similar convergences were followed by major upward price movements. In contrast, market downturns in 2021, 2022, and 2018 occurred when there was a large gap between these two lines.
China has vowed retaliation against the U.S. tariffs, while several European countries are also preparing countermeasures. This escalation threatens to further destabilize global markets and could continue to pressure cryptocurrency prices.
The recent price gains in gold and the Japanese yen have also challenged the notion of Bitcoin serving as an effective anti-risk hedge. These traditional safe-haven assets have outperformed as investors seek shelter from market turbulence.
As trade tensions continue to mount, investors across all markets are adopting more defensive strategies. The decline in Bitcoin’s price reflects the general market sentiment: nervous, fearful, and uncertain about what the future holds.
Bitcoin was trading at $76,523.5 as of 01:41 ET (05:41 GMT) on Wednesday, representing a 4.2% drop. The cryptocurrency had briefly rebounded on Tuesday before erasing those gains.
The decline puts Bitcoin close to a six-month low hit earlier this week. The formation of a death cross – a bearish technical indicator – earlier this week has further rattled sentiment towards the cryptocurrency.
