Crypto

Why is Bitcoin price down today?

Bitcoin’s (BTC) price has dropped by over 5% over the last 24 hours to $95,279, leading to declines across the crypto market. This comes after US President Donald Trump announced tariffs on imported goods from Canada, Mexico and China.

BTC/USD daily chart. Source: Cointelegraph/TradingView

Key takeaways:

  • Bitcoin’s drawdown follows President Donald Trump’s new tariffs on China, Mexico, and Canada.

  • Other top-cap cryptocurrencies are also down, exacerbated by massive liquidations across the crypto market.

  • Bitcoin price needs to hold above a key support area to avoid a deeper correction.

BTC price drops after Trump announces new tariffs

Bitcoin, which has held above $100,00 since Jan. 17, was trading just above $95,000 at the time of publication. 

Key points to note:

  • Bitcoin is down 5% over the last 24 hours.

  • BTC dropped as much as 9.7% to a low of $91,530 on Feb. 3.

  • The decline follows Trump’s announcement of 25% tariffs on Mexican and Canadian goods and 10% levies on Chinese imports, set to take effect on Tuesday, Feb. 4.

Cryptocurrencies, Federal Reserve, Central Bank, Bitcoin Price, Bitcoin Regulation, Markets, Cryptocurrency Exchange, Interest Rate, BTC Markets

Source: The White House

  • The anticipation of a potential trade war has led investors to seek safer assets, causing a flight from riskier investments like Bitcoin.

“Today’s risk-off move is driven by cross-asset portfolio rebalancing rather than a single-asset event,” trading firm QCP Capital commented in its latest post to Telegram channel subscribers

The firm added: 

“Expect continued volatility as Trump prepares to negotiate with Canada and Mexico tonight while claiming tariffs on the EU are “definitely happening.”

Leveraged liquidations drive Bitcoin price lower

The drop in Bitcoin’s price rise has triggered significant liquidations in the derivatives market, signaling strong bearish pressure.

Related: Ether, altcoins dive double digits as Trump tariffs take further toll

Key points:

  • Approximately $465 million in Bitcoin leverage positions have been liquidated over the last 24 hours. 

  •  More than $389 million of these were long BTC position liquidations compared to $75 million that were shorts.

  • Bullish traders are forced to close their positions when long positions are liquidated.

Cryptocurrencies, Federal Reserve, Central Bank, Bitcoin Price, Bitcoin Regulation, Markets, Cryptocurrency Exchange, Interest Rate, BTC Markets

Crypto market liquidations ft. XRP. Source: CoinGlass

  • Bitcoin’s price dropped further due to a cascading liquidation effect.

  • The scale of these liquidations mirrors Dec. 20, 2024, when more than $419 million in long positions were wiped out, accompanying an 11% BTC price drop.

  • Over $2.5 billion in leverage positions were wiped out, making it one of the largest liquidation events in history, which some analysts have described as “epic.”

Bitcoin price needs to hold key trendline

On Feb. 3, Bitcoin’s price fell toward the critical support provided by the 100-day simple moving average (SMA), which is currently at $93,899.

Key levels to watch:

  • Holding above the 100-day SMA level would also help Bitcoin reclaim the 50-day SMA at $99,000.

  • The RSI at 38 points is nearing oversold conditions, increasing the chances of a possible recovery in the short term.

Cryptocurrencies, Federal Reserve, Central Bank, Bitcoin Price, Bitcoin Regulation, Markets, Cryptocurrency Exchange, Interest Rate, BTC Markets

BTC/USD daily chart. Source: Cointelegraph/TradingView

Commenting on Bitcoin’s latest price action, popular trader Daan Crypto Trades explains that the asset could chop in a wide range over the next few days, with $90,000 acting as support and the upside capped at $108,000.

“$90K-$108K is roughly the area to watch. Everything in between will be choppy.”

Cryptocurrencies, Federal Reserve, Central Bank, Bitcoin Price, Bitcoin Regulation, Markets, Cryptocurrency Exchange, Interest Rate, BTC Markets

BTC/USD chart. Source: Daan Crypto Trades

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.