Bitcoin (BTC) rallied today right after Donald Trump announced a comprehensive plan to impose retaliatory tariffs on multiple countries.
Starting at midnight, a 25% straightforward levy will be imposed on imported automobiles. Trump emphasized that American companies are not allowed to sell their cars in many of these markets.
Although the market initially reacted negatively to the news, buyers made their way and pushed the price of BTC to session highs and blew up multiple resistances along the way. BTC went up by 3% and came close to $90,000.
Trading volumes in the past 24 hours have shot up by 32% after they were unmoved compared to the previous day.
Solana (SOL) has now gone up by 5.2% possibly as Official Trump (TRUMP) has seen its trading volumes surge after the President’s speech.
The market had been waiting for this announcement throughout the day. Imposing tariffs unilaterally on countries is considered a bearish signal as it could lead to higher inflation. This could deter the Federal Reserve from lowering interest rates this year.
It is the market’s baseline scenario that rates will be cut two times in 2025. If the Fed changes course and scraps those plans, risky assets like cryptocurrencies will move lower.
Although the market reacted positively to the news initially, this may have been an attempt to trap short-sellers as the announcement possibly resulted in retail traders opening short positions.
Bitcoin Short-Sellers Were Wiped During Trump’s Speech
Data from CoinGlass shows that nearly $100 million worth of short positions in cryptocurrencies were wiped in the past hour.
The daily chart shows that BTC has now retreated from a key resistance it tagged earlier in the session. However, a short-term bullish outlook is still in play as the token has bounced off a key Fibonacci level.
The 61.8% retracement level is typically considered a high-value threshold for traders as a bounce off this marker typically results in a significant near-term uptrend for the asset that can push it to a higher high.
In the case of BTC, that would mean a retest of the $90,000 resistance – an important resistance level that could catalyze further price increases if bulls overcome the selling pressure.
However, looking at the hourly price action, the sell-off has temporarily stopped at the 61.8% Fibonacci level. It seems that bulls are heavily defending this threshold as a break below would reverse BTC’s uptrend.
Momentum indicators have already flashed sell signals as the Relative Strength Index (RSI) crossed below the signal line and it currently stands 17% below this important marker.
The next hour will be critical to determine where BTC may be heading as a break below this Fibonacci support could result in a big drop that could spill over to tomorrow’s session.
The initial target for BTC would be set at the mid-80,000s and the next step would be at around $82,500.
Despite these temporary setbacks, BTC’s long-term trajectory is still bullish. Analysts predict that the token could rise to $250,000 before the end of the year.
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