Here’s Why Bitcoin (BTC) Price Is Dumping

TLDR:

• Bitcoin trades at $118,223, down 1.88% in 24 hours, as tariffs reignite global trade tension and slow capital flow.
• Trump’s tariff threat triggers inflation fears, forcing investors to rotate from risk assets like crypto to safer holdings.
• Analysts view the $116K–$118K zone as key BTC support, often marking the point where stronger buyers return.
• Market recovery depends on softer tariff tone or Fed easing, both of which could restore crypto liquidity and confidence.

Bitcoin’s price is sliding fast, and traders are feeling the pressure. The world’s largest crypto asset has fallen as renewed trade tensions shake global markets. 

U.S. tariff plans on Chinese goods have rattled investors, triggering risk aversion across major assets. Liquidity is tightening, leverage is unwinding, and crypto is catching the heat first. Market watchers say the drop may deepen before any recovery takes hold.

Tariff Shock Sends Crypto Markets Lower

According to Bull Theory on X, Bitcoin’s sharp decline comes as former U.S. President Donald Trump announced plans for heavy tariffs and export controls on Chinese goods. 

The move targets key industrial materials and renews fears of disrupted supply chains. As inflation risks rise, liquidity conditions have worsened, pressuring risk assets like crypto.

Investors are rotating out of volatile holdings and moving into safer assets such as gold and cash. The shift is visible across trading desks as leveraged crypto positions unwind quickly. 

Analysts say this rotation is a standard reaction when inflation expectations climb and monetary policy easing appears less likely.

Past tariff tensions have hit BTC and altcoins in similar ways. During the 2025 trade standoff, the market saw steep liquidations followed by weeks of choppy recovery. This pattern, traders note, often tests market depth before stronger hands re-enter.

CoinGecko data shows Bitcoin trading at $118,223, reflecting a 1.88% decline in the last 24 hours and 3.7% over the past week. The selling pressure aligns with global equity weakness and slowing capital inflows into crypto exchanges.

Bitcoin Price Outlook: Key Levels and What Comes Next

Market watchers are now eyeing the $116,000 to $118,000 zone as potential short-term support. 

Bull Theory pointed out that buyers have historically stepped in near these levels during high-volatility periods. If the zone holds, a short-term bounce could form once sentiment steadies.

However, traders remain cautious as policy uncertainty persists. Any delay in expected rate cuts could keep liquidity tight and extend the correction. Analysts suggest that funding rates, open interest, and stablecoin flows will be key indicators for the next move.

If tariff rhetoric softens or the Federal Reserve signals easing, market sentiment could flip quickly. In that case, accumulation may resume as investors reposition for Q4, historically one of Bitcoin’s stronger periods. 

Despite near-term stress, long-term traders remain confident in crypto’s resilience once liquidity returns.

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