Trump’s Trade War Threat Sparks Bitcoin Crash—Why August 1 Could Be the Day Crypto Markets Implode

Bitcoin just got sucker-punched by geopolitics—again. The latest Trump trade war salvo sent BTC into a tailspin, and August 1 looms as a potential breaking point for digital assets.

Here’s what’s rattling the market:

• Trade war fears triggering classic risk-off behavior
• Liquidity crunch concerns as August deadlines approach
• Whales playing both sides of the volatility

Market makers are bracing for impact as the political rhetoric heats up. 'When elephants fight, the grass gets trampled,' quipped one OTC trader—though in crypto’s case, the grass is usually leveraged 100x.

Smart money’s watching the August 1 marker like a hawk. That’s when new tariffs could hit—and when crypto’s correlation with risk assets gets its next stress test. Buckle up.

Bitcoin Falls to $107K as Investors Flee Risk on Trump Tariff Delay

The market response was swift. U.S. stocks fell sharply, with the S&P 500 dropping nearly 1%, its worst single-day decline in three weeks.

Japanese automakers were hit particularly hard, with shares of Toyota and Honda down 4.1% and 3.8%, respectively. The dollar surged against the yen and won, as investors sought safer ground.

Bitcoin was not spared. After flirting with an all-time high of $111,814 last week, BTC slid 0.74% in the last 24 hours and is now trading at $107,936.08.

Source: CoinGecko

While the dip may appear modest, analysts say the timing, coming just as equities began tumbling, suggests Bitcoin is increasingly being treated as a risk asset during geopolitical uncertainty.

The crash comes amid rising confusion over the WHITE House’s trade strategy. For weeks, investors had been eyeing July 9 as a critical tariff deadline, set by Trump himself after a chaotic string of announcements in early spring.

But on Monday, White House Press Secretary Karoline Leavitt confirmed the president would sign an executive order delaying that deadline to August 1.

“President Trump is determined to bring reciprocal balance to trade, and the new timeline ensures our partners have every opportunity to reach fair agreements,” Leavitt told reporters.

.@PressSec Karoline Leavitt on tariff deadline: "The president will also sign an executive order today, delaying the July 9th deadline to August 1st" pic.twitter.com/jMXn8cCalz

The delay, however, may only be stoking more uncertainty. Trump has a history of reversing course on trade policy with little notice, making it difficult for investors and foreign governments alike to plan. As White House spokesman Kush Desai put it bluntly, “Any decisions around trade will come directly from the president himself.”

Trump also added a fresh LAYER of pressure on Sunday, threatening a 10% additional tariff on any country aligning with BRICS policies, a clear swipe at Brazil, Russia, India, and China, whose leaders were meeting in Rio de Janeiro.

Treasury Secretary Scott Bessent sought to calm markets Monday, noting that Trump is focused on “the quality of deals, not the quantity,” but stopped short of naming any countries nearing agreement.

Crypto investors, long accustomed to Bitcoin’s volatility, now find themselves navigating new macro headwinds. Bitcoin’s trading volume ROSE slightly, up 2.04% to $26.9 billion, as traders responded to the latest geopolitical flare-up.

But with the August 1 tariff deadline looming and trade policy in flux, the path forward remains uncertain.

Bitcoin Futures Rebound, but Price Action Signals Caution

Bitcoin futures markets are showing signs of renewed optimism, with aggregated open interest climbing 7% over the past month, the first sustained increase since BTC’s 12% decline between May and June.

The rise in open interest suggests growing trader confidence, as more capital flows into long positions.

Aggregated Open Interest in bitcoin Futures. Source: Axel Adler Jr

However, the price action tells a more cautious story. After briefly touching $109,500, Bitcoin has slipped back to around $108,000, forming a double top pattern on lower timeframes, a potential warning sign of hesitation among bulls.

At the same time, net long exposure in Bitcoin futures stands at $27.4 million, remaining in positive territory for over 24 hours. But price remains stuck in a tight range, and analysts are watching key technical levels closely.

Notably, BTC continues to trade above short-term support at the 200-day EMA on the one-hour chart. However, multiple bounces from the $107,300 zone have created a cluster of “equal lows,” an area often targeted for liquidity sweeps.

Bitcoin one-hour chart. Source: TradingView

A break below that level could trigger a stop-loss cascade, potentially dragging the price into a fair value gap between $107,000 and $106,300.

“If buyers fail to step in strongly below $107K, we could see deeper losses toward $105,000,” one analyst warned.

Still, there’s room for upside. A strong recovery from below $107,000 could reignite momentum, especially if buy-side pressure lifts BTC back above $108,000.

More decisively, a clean break above $109,500 would invalidate the downside scenario and open the door for a push toward the $112,000 range.

For now, all eyes are on August 1. Whether it’s the start of another full-blown trade war or just the latest bluff in Trump’s economic playbook, the crypto market, like Wall Street, is bracing for impact.