Bitcoin Struck by a Black Swan

[Redator]

A black swan has landed on the cryptocurrency market. Donald Trump's announcement of 100% tariffs on Chinese goods—made via social media—served as the unforeseen trigger that led to record sell-offs in Bitcoin from its historic highs. BTC/USD plummeted by 12% in intraday trading. According to Coinglass, a staggering $19 billion in positions were liquidated within 24 hours, and over 1.6 million trader accounts were closed due to unrecoverable losses.

The crypto market incurred the heaviest damage due to its 24/7 trading cycle. Trump, careful to spare his beloved equities, made his tariff announcement after U.S. stock markets had closed. Bitcoin fared relatively well under the circumstances. Ethereum tumbled to $3,500, while the most significant carnage occurred in the altcoin market, where higher volatility triggered mass liquidations of heavily leveraged positions.

Euphoria also played a part. Before the rekindling of the U.S.–China trade war, the digital asset market was soaring. Not only were geopolitical tensions and the ongoing U.S. government shutdown boosting demand for Bitcoin as "digital gold," but the record highs in the S&P 500 fueled BTC/USD's rally amid rising interest in risk-on assets.

Some studies even speculated that both cryptocurrencies and gold might begin displacing fiat currencies in central bank reserves.

Gold and Bitcoin Price Dynamics

The trend of dedollarization accelerated after the Russia–Ukraine conflict and the freezing of the Bank of Russia's reserves, leading to a decline in the U.S. dollar's share in global reserves. At the same time, gold's share rose and even surpassed that of the euro. According to Deutsche Bank, this trend is likely to continue, with cryptocurrencies expected to join precious metals in gaining ground. Comparisons are being drawn to the post-crisis era of 2010, when central banks became net buyers of gold.

Dissenting views remain. JP Morgan believes widespread adoption of stablecoins will actually increase global demand for the U.S. dollar by $1.4 trillion by 2027.

Euphoria seldom ends well. On the futures market, bets were heavily concentrated on BTC/USD reaching $140,000 by year-end. Now, bulls may need to dial back their ambitions—unless, of course, Trump's 100% tariff plan turns out to be just another bluff. The U.S. president has frequently walked back on his threats, giving rise to the so-called "TACO" trading theory—"Trump Always Caves Out."

Unsurprisingly, Bitcoin has begun to recover as the U.S. administration signals its readiness to negotiate with China. Will China be willing to talk? That remains the key question. Beijing currently controls the supply chain for rare-earth minerals and key battery materials—resources vital to U.S. data centers that underpin artificial intelligence infrastructure.

Technical Analysis

On the daily BTC/USD chart, an inside bar has formed, followed by a rejection from resistance at fair value. As long as quotes remain below $115,600, the technical bias favors selling.

The material has been provided by InstaForex Company - www.instaforex.com