Bitcoin has once again demonstrated its sensitivity to external factors as it experienced a knee-jerk reaction to the latest installment of the US trade war, this time targeting the European Union. The cryptocurrency market was plunged into volatility as BTC price action saw a dive of up to 4% before recovering. The $110,000 price level has now become a crucial resistance point for Bitcoin.

The flash volatility in Bitcoin coincided with news headlines liquidating long positions, leading to BTC/USD hitting lows of $107,367 on Bitstamp before bouncing back. The trigger for this price movement was comments from US President Donald Trump announcing a proposed 50% tariff on the European Union starting June 1, 2025.

The impact of this news was not limited to Bitcoin, as US stocks also reacted immediately, with the S&P 500 and Nasdaq Composite Index experiencing declines of 1% and 1.2%, respectively. Crypto market participants were not surprised by this reaction, given the historical precedent of tariff-related volatility affecting various markets.

Data from monitoring resources showed significant liquidations in the crypto market, with nearly $350 million liquidated in 4 hours and over $500 million in 24 hours. Traders and analysts were closely watching the market's response to the trade uncertainty introduced by Trump's announcement, with many emphasizing the need for Bitcoin to hold key support levels to maintain bullish momentum.

Some traders highlighted the lack of resistance levels above the current spot price of Bitcoin, suggesting potential upside if key levels are held. The macro outlook was also discussed, with trading resources analyzing the delicate balance the Trump administration must strike between maintaining tariffs and managing inflation expectations without resorting to Federal Reserve interest rate cuts.

As traders navigate the market turbulence triggered by geopolitical events, the consensus remains on the importance of monitoring key price levels and trends to make informed trading decisions. The volatile nature of the cryptocurrency market underscores the need for caution and thorough research before making investment decisions.

In conclusion, Bitcoin's reaction to the US trade war developments highlights the interconnectedness of global events and financial markets. Traders and investors must remain vigilant and adaptable to navigate the rapid fluctuations in the cryptocurrency landscape.

Source: https://cointelegraph.com/news/bitcoin-price-drops-4-trump-eu-tariff-talk-liquidates-over-300m?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound