Bitcoin dropped below $120,000 following former U.S. President Donald Trump’s threat to impose 100% tariffs on Russia. Despite the dip, on-chain metrics indicate a potential continuation of BTC’s bullish momentum.

BTC Price Drops After Reaching All-Time High

Over the weekend and into Monday morning, Bitcoin surged to an all-time high of $123,091. However, it quickly pulled back to around $120,124 and continued declining toward $119,900. This drop came after Trump publicly threatened to impose 100% tariffs on Russia within 50 days unless the war in Ukraine ends. He also confirmed a new arms deal with NATO allies.

The sharp pullback sparked concerns that Bitcoin may have hit a local top. Depending on broader market sentiment and global political developments, a correction or sideways movement could follow.

However, with Crypto Week just starting, analysts believe the BTC rally could continue, especially if key crypto-related legislation is approved. Some predict BTC could soon climb toward a new all-time high of $136,000.

Trump’s Threat Sparks Market Volatility

During a joint press conference with NATO Secretary General Mark Rutte, Trump warned that Russia would face secondary tariffs of up to 100% unless a ceasefire deal is reached within 50 days. “We have no choice but to impose secondary tariffs… they’re pretty tough,” he stated from the White House.

Trump also confirmed the finalization of a large arms deal with NATO. According to him, “We’ll send them a lot of weapons of all kinds, and they will deliver them immediately.” The weapons will be produced in the U.S., while European allies will finance the procurement.

After the announcement, Bitcoin fell over $3,000, testing support around $119,000. These comments follow Trump’s recent plans to impose 30% tariffs on imports from Mexico and the EU and 50% tariffs on copper and other commodities from various nations.

On-Chain Metrics Show Profit-Taking and a Possible Local Top

According to CryptoQuant.com, exchange inflows spiked after BTC hit $123,000, signaling profit-taking by large holders. In a statement, the firm noted:

“This type of movement typically indicates a local top and could lead to a healthy correction or consolidation in the coming days.”

Meanwhile, the Crypto Fear & Greed Index rose to 70, firmly in the “greed” zone. While this reflects strong investor optimism, such high readings can also suggest overbought conditions. Analysts caution that traders often lock in profits when greed levels rise to these extremes.

Derivative markets also showed increasing activity, with open interest in Bitcoin futures rising by 3.87% to $87.95 billion. According to Coinglass, trading volume jumped by 146.88% to over $152 billion, pointing to strong—though possibly overheated—buying pressure that may sustain BTC’s uptrend.


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