Trump Tariffs Shake Crypto Market as Bitcoin Falls 8%

The crypto market took a significant hit in the past hours as President Donald Trump’s announcement of wide-ranging tariffs rattled global financial markets.

Bitcoin dropped approximately 8% following the news, while the broader cryptocurrency market saw a decline of nearly 7% in total value over the past 24 hours.

Trump’s April 2 announcement introduced reciprocal tariffs of at least 10% on countries that currently have tariffs on US goods. The policy caused immediate market turmoil, with the S&P 500 seeing a 4.2% drop at market open—its largest single-day decline since June 2020.

The Dow Jones Industrial Average fell 3.41%, and the Nasdaq Composite dropped 5.23%, wiping out approximately $2 trillion in market value.

Crypto Market Response and Expert Analysis

Bitcoin, which had approached $88,500 before the announcement, quickly retreated to around $82,000 following the news. Despite this sharp decline, some analysts view the current situation optimistically.

The Tariffs won’t be as bad as the entire population expects them to be.

Uncertainty fades away.

Gold will drop. ‘Buy the rumor, sell the news’#Altcoins & #Bitcoin goes up. ‘Sell the rumor, buy the news’

— Michaël van de Poppe (@CryptoMichNL) April 2, 2025

According to Valentin Fournier, Lead Analyst at BRN, the tariff announcement “creates buying opportunity as uncertainty fades,” suggesting that institutional buying pressure could soon return.

Meanwhile, data shows that US spot Bitcoin ETFs recorded $218 million in inflows on Wednesday, a significant change from the previous day’s $157 million in outflows. This indicates that institutional investors may already be taking advantage of lower prices.

David Hernandez, Crypto Investment Specialist at 21Shares, noted that “Bitcoin’s resilience to tariffs relative to equities could reignite institutional demand.”

He emphasized that markets typically respond well to certainty, and with speculation now largely removed, institutional investors might see an opportunity to buy at compressed valuations.

However, not all cryptocurrencies are experiencing the same recovery signals. Ethereum continues to show outflows and remains 55% below its cycle high.

Market Volatility Expected to Continue

Despite hopes that institutional adoption would dampen crypto market volatility, Thomas Perfumo, Global Economist at Kraken, believes major price swings will remain a feature of the market until “adoption matures.” He characterized the current volatility as “the manifestation of mainstream adoption of a digitally scarce asset class” where significant demand meets fixed supply.

Bitcoin bulls appear capable of defending the $80,000 support level for now, but some analysts warn of potential further drops. Joao Wedson, CEO of Alphractal, cautioned that liquidation heatmaps indicate heavy leverage around the $80,000 level, raising the possibility of a drop to $64,000-$65,000 if Bitcoin breaks below current levels with high trading volume.

Bitcoin’s Open Interest has fallen below $50B USD again.

The aggregated Liquidation Levels from various exchanges over the last 3 and 7 days show key levels around 80K.

If you were confident about a return above 90K, unfortunately, that is unlikely to happen this week.

I still… pic.twitter.com/oB6WGZVTQr

— Joao Wedson (@joao_wedson) April 3, 2025

For traders navigating these turbulent markets, the coming days will be crucial in determining whether the current dip represents a buying opportunity or the beginning of a deeper correction.