The price of Bitcoin witnessed a sharp decline of 4.5% over 24 hours, influenced by former US President Donald Trump's announcement of a 50% tariff on European Union imports starting June 1, 2025. This announcement wiped out $638 million in leveraged financial positions, according to 'CoinGlass' data.
Key levels to watch:
1. Support Levels:
- $106,764: Known as the naked Point of Control (nPOC), which is an area that saw strong demand on May 21, driving Bitcoin up 4.8% to a new record level.
- $106,017: Known as weak lows, and may trigger a quick bounce if the decline continues.
2. Resistance Level:
- $110,000: Represents Bitcoin's previous peak and is considered a critical barrier to regain the upward trend.
Impact of the announcement on market indicators:
- Rise in implied volatility (IV): Suddenly spiked before the crash, triggering a sell signal.
- Decrease in Open Interest: Dropped by $1.87 billion, indicating that the market is shedding leveraged positions.
Broader context:
Trump confirmed that negotiations with the European Union are futile, but suggested the possibility of delaying tariffs if EU countries set up factories in the United States. This escalation raised fears of a renewed trade war, intensifying volatility in global markets, including stocks and digital assets.
At the time of publishing the report, the price of Bitcoin was trading around $107,739, with slight recovery attempts during the Asian session. Traders are advised to monitor the price's interaction with the mentioned levels and prepare for additional volatility as geopolitical tensions continue.