Why Is the Price of Bitcoin (BTC) Crashing Today ?
Bitcoin (BTC) price plummeted following the US president's announcement of new taxes. What triggered this significant drop? Let's delve into the technical analysis and outlook for BTC.
Why is the Bitcoin (BTC) Price Crashing ?
Following the announcement of new customs duties by U.S. President Donald Trump, the entire cryptocurrency market experienced a massive sell-off. In this context, Bitcoin (BTC), the largest cryptocurrency in terms of market capitalization, plunged by over 6%, entered a downtrend, and is now heading towards a rebound.
The potential reason for this massive sell-off in the market is the announcement of these new customs duties, which will now impose tariffs of 10% on key countries, while China, the EU, and Japan will face tariffs of 34%, 20%, and 24% respectively.
#Bitcoin is still holding a higher low, while the stock market digests Trump's new tariffs.
— Jelle (@CryptoJelleNL) April 4, 2025
It's clear Bitcoin wants to move higher. As soon as the S&P bounces – I expect our coins to take off.
Patience!pic.twitter.com/RskMdacVHv
Following this announcement, BTC lost its recent support that it had formed during market uncertainty. However, this is undoubtedly also due to the massive drop in the SP500 that was rejected from its 200-day moving average and is heading towards a significant drop.
According to analysts, the SP500 could see its worst drop in over 20 years. Consequently, BTC is suffering even more during stock market openings. Nevertheless, there is a sign of hope for a Bitcoin rebound today.
Quite a big gap in the SP500
— Centurion (@trade_centurion) April 3, 2025.
When this void is filled, the cryptocurrency market could go up a lot.
It's still unclear when that will happen. pic.twitter.com/4If0vmV1X5
Indeed, the SP500 experienced one of its biggest CME gaps in history, recording a gap of about 5%. Historically, in approximately 60-70% of cases, after such a significant gap, the market shows a rise the next day, often due to buying or stabilization after the initial panic. For example:
- After the gap on October 19, 1987, +5.33%.
- After the gap on October 15, 2008, +4.25%.
- After the gap on March 16, 2020, +6.00%.
Consequently, BTC could benefit today from this opportune rebound of the SP500 before it continues its slump.
Bitcoin Technical Analysis and Future Levels
According to experts’ technical analysis, BTC recently lost the support of $82,500 and fell below the 200-day Exponential Moving Average (EMA), indicating that the asset is entering a strong downtrend.
However, BTC has already rebounded well, with a +2.84% increase since yesterday’s drop.
If BTC closes its daily candle below the $81,500 level, it is highly likely to experience a significant drop and reach the $77,700 level or even lower in the coming days.
BTC could target its 50-day moving average at $87,500 during the day in case of market gains. The next target is at $89,600, a zone where over 400 million dollars of shorts are set to be liquidated.
Massive Sale of 18,930 BTC by Short-Term Holders
Following this massive price drop and the shift in market sentiment towards bearish, short-term holders have been shaken. Recently, a prominent crypto expert shared a message on X (formerly Twitter) indicating that short-term holders had sold 18,930 BTC last night, right after the announcement of the new taxes.
“18,930 #Bitcoin $BTC were sold by short-term holders last night, right after @realDonaldTrump announced new taxes!”
This massive sale by short-term holders indicates BTC is capitulating. It could mark a rebound if the smart money used this massive sale as an opportunity to buy lower.
Technical analyses indicate that BTC has lost momentum and could continue to decline in the coming weeks. However, today could be a final glimmer of hope rebound. Nevertheless, caution is advised, as volatility could remain high.
Charles Ledoux
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
DISCLAIMER
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This article is for informational purposes only and should not be considered as investment advice. Some of the partners featured on this site may not be regulated in your country. It is your responsibility to verify the compliance of these services with local regulations before using them.
DISCLAIMER
This article is for informational purposes only and should not be considered as investment advice. Trading cryptocurrencies involves risks, and it is important not to invest more than you can afford to lose.
InvestX is not responsible for the quality of the products or services presented on this page and cannot be held liable, directly or indirectly, for any damage or loss caused by the use of any product or service featured in this article. Investments in crypto assets are inherently risky; readers should conduct their own research before taking any action and invest only within their financial means. This article does not constitute investment advice.
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