Bitcoin (BTC) Could Tank Below $75K if This Key Support Fails (Analyst)
TL;DR
- Bitcoin (BTC) has tumbled by 10% since the start of February, with analysts warning that further declines to $80,000 or even $74,400 are possible if key support levels fail.
- Others suggest Trumps tariff policies could drive demand for BTC as a hedge against inflation and currency devaluation.
The Correction Might be Just Starting
January was a highly successful period for the primary cryptocurrency, with its price soaring to a new all-time high of almost $110,000 shortly before Donald Trumps inauguration. Despite the enhanced volatility in the following days, bitcoin (BTC) was trading at over $104,000 on the last day of the month.
Numerous industry participants expected February to be even more fortunate. After all, it has been a historically strong month for the asset, and just two of the last 12 Februaries have ended in the red. The ongoing month also comes after a halving year, which in previous cases has resulted in double-digit gains.
Contrary to the presumption, BTC did not start the month on the right foot, and in the last three days, it tumbled from around $102,000 to the local bottom of less than $92,000. In the past several hours, the bulls stepped in and pushed the valuation to the current $95,000 (per CoinGeckos data).
Perhaps the most obvious factor contributing to the pullback is the macroeconomic uncertainty caused by Donald Trumps decision to impose hefty tariffs on China, Canada, and Mexico.
One person noting the wipeout in the cryptocurrency sector was the BTC proponent, using the X moniker Momin. He suggested that if Trumps decision keeps shaking the market, the assets price may drop to $80,000.
You dont need to deploy all your money here, let the situation fold out. Stay safe, he added.
Ali Martinez also gave his two cents. The analyst told his over 120,000 followers on X that $92,180 is now one of the most critical support levels for BTC based on the MVRV Pricing Bands. He believes that breaking below that mark could lead to a massive crash to as low as $74,400.
Pain Only in the Short Term?
The tariff war led by Trump has harmed the financial markets and the cryptocurrency industry, but according to Jeff Park (Head of Strategy at Bitwise), it might have a positive effect on bitcoin in the long run.
He thinks the actual effects of the increased rates should be understood through two key ideas: the Triffin dilemma and Trumps economic plans.
The Triffin dilemma is an economic paradox that arises when a national currency also serves as the worlds reserve currency. While this gives the country certain financial advantages, it also means it must maintain trade deficits to supply liquidity.
Park sees tariffs as a short-term tactic to push nations to reduce their US dollar holdings and shift investments away from Americas debt, with the real goal being a controlled devaluation of the greenback. He also believes Trumps team aims to lower bond yields and cut reliance on foreign capital, making BTC a key hedge against inflation.
As the world enters a sustained tariff war, the demand for bitcoin will skyrocket. Both US investors and foreign market participants will flock to bitcoin for different reasons, but the outcome remains the same higher prices, and at an accelerated pace, he concluded.
The post Bitcoin (BTC) Could Tank Below $75K if This Key Support Fails (Analyst) appeared first on CryptoPotato.
Read more: https://cryptopotato.com/bitcoin-btc-could-tank-below-75k-if-this-key-support-fails-analyst/
Text source: CryptoPotato
