Trump’s Tariff Shockwave: Bitcoin (BTC) Plunges as Markets Panic

Markets bled red after former President Trump dropped a tariff bombshell—and Bitcoin wasn’t spared. Here’s why crypto got caught in the crossfire.

### The Domino Effect: Tariffs Tank Risk Assets

When Trump announced aggressive new trade policies, traditional markets shuddered. Crypto, ever the volatile cousin, followed suit. BTC nosedived alongside equities as investors raced for exits.

### Liquidity Crunch or Overreaction?

Traders dumped positions faster than a hot NFT project. The selloff exposed crypto’s lingering sensitivity to macro shocks—despite years of ‘decoupling’ claims. (Spoiler: Wall Street still calls the shots.)

### Silver Lining Playbook

History says panic dips get bought. Whether this is a buying opportunity or the start of something uglier depends on one thing: how fast traders forget politics and remember Bitcoin’s 2025 halving countdown.

*Another day, another ‘black swan’—brought to you by the fine folks who still think tariffs solve anything.*

TLDR

• Bitcoin fell below $108,000 on July 7th following President Trump’s surprise tariff announcements targeting Japan, South Korea, and other nations
• The cryptocurrency acted as a risk asset, dropping alongside the S&P 500 rather than behaving like digital gold during market uncertainty
• Technical analysis shows Bitcoin in a Bollinger Bands squeeze with volatility at bull cycle lows, suggesting a major price move is coming
• Bitcoin has recovered to $108,899 at press time while holding above key support levels around $106,000-$107,000
• The tariff deadline was pushed to August 1st, but market uncertainty remains high as investors wait for direction

Bitcoin experienced a sharp decline on July 7th, dropping below $108,000 as global markets reacted to President Donald Trump’s unexpected tariff announcements. The cryptocurrency’s response highlighted its continued correlation with traditional risk assets during periods of uncertainty.

The selloff began when TRUMP announced 25% tariffs on imports from Japan and South Korea, two key U.S. allies. These duties were later expanded to include Malaysia, Kazakhstan, and South Africa, with tariffs ranging from 25% to 40%. The announcements sparked immediate concern about renewed trade tensions.

Bitcoin fell sharply in response, mirroring the S&P 500’s steep decline on the same day. This synchronized movement across asset classes demonstrated Bitcoin’s tendency to act as a risk asset rather than a SAFE haven during market stress. The cryptocurrency’s behavior contrasted with its often-cited status as digital gold.

Japanese automakers were among the hardest hit by the tariff news. Toyota and Honda shares tumbled as investors feared retaliatory trade measures. The U.S. dollar surged against the yen and won as traders sought safety in the greenback.

Technical Analysis Points to Potential Breakout

Despite the recent volatility, Bitcoin’s technical picture shows interesting developments. Analyst Axel Adler noted that Bitcoin is currently experiencing a Bollinger Bands squeeze, with the spread between upper and lower bands at just 7.7%. This marks one of the tightest ranges seen throughout the current bull cycle.

Currently, we are observing a classic Bollinger Bands squeeze: the range between the upper and lower boundaries has fallen to 7.7% one of the lowest values throughout the entire bull cycle. The decrease in volatility indicates energy accumulation in the market the price is ready… pic.twitter.com/anv5GSzVlU

— Axel 💎🙌 Adler Jr (@AxelAdlerJr) July 8, 2025

Historical data suggests these compressions often precede explosive moves in either direction. Of six major Bollinger Band squeezes this cycle, four resulted in immediate upside moves, while two triggered brief corrections before rallies resumed. Given Bitcoin’s position above support levels, the probability favors an upside breakout.

The 12-hour chart shows bitcoin trading at $108,892, struggling to break above the key resistance zone around $109,300. This level has acted as a rejection point multiple times since early June. However, Bitcoin remains above the 50 SMA at $106,442 and 100 SMA at $106,671, indicating bullish momentum persists.

Bulls have successfully defended the $106,000-$107,000 support range several times, preventing deeper corrections. Volume has declined in recent sessions, suggesting the market awaits a catalyst to break out of this tight range.

Market Uncertainty Continues

The WHITE House’s decision to push the anticipated tariff deadline to August 1st did little to ease investor concerns. Press Secretary Karoline Leavitt stated that President Trump is “determined to bring reciprocal balance to trade, and the new timeline ensures our partners have every opportunity to reach fair agreements.”

Treasury Secretary Scott Bessent attempted to calm markets, noting that President Trump is focused on “the quality of trade deals, not the quantity.” However, Trump’s unpredictability on trade policy, combined with fresh threats targeting BRICS-aligned nations, left investors uncertain.

Bitcoin has since recovered to $108,899 at press time, showing resilience despite the initial selloff. The cryptocurrency continues to consolidate below its all-time high of $112,000, reached in late May.

The recent U.S. Congress passage of Trump’s economic bill before the July 4 deadline adds another LAYER to the market outlook. The package includes tax cuts and public spending measures expected to fuel inflation in coming quarters.

If Bitcoin closes decisively above $109,300 on strong volume, a run toward the $112,000 all-time high becomes increasingly likely. On the downside, a break below the 100 SMA could expose the cryptocurrency to the next major support around $103,600.

At press time, Bitcoin was trading at $108,899, having recovered from the earlier tariff-induced selloff while technical indicators suggest a major MOVE may be imminent.