The price of Bitcoin suffered a new drop this Monday (7), even trading below $75,000 amid a wave of instability in global financial markets.
The drop comes after the U.S. government, under Donald Trump's leadership, announced the implementation of new trade tariffs affecting several nations, raising fears of a possible global recession.
Bitcoin was traded at $74,511 in the early hours of this Monday (7), with a drop of approximately 4% in the last 24 hours.
Despite recording values above $80,000 for a large part of the year, the digital currency has been losing strength and has accumulated a depreciation of about 30% from its all-time high recorded in January.
At the end of last week, Bitcoin managed to remain stable in the range between $82,000 and $83,000, even as global stock markets plummeted and traditionally seen safe-haven assets, such as gold, also faced selling pressure.
However, this momentum did not sustain with the intensification of fears around U.S. trade tariffs.
[Liquidations and domino effect]
The drop in Bitcoin's price triggered a wave of long liquidations — trades where traders were betting on the asset's appreciation.
According to data from the CoinGlass platform, the market saw over $247 million in long liquidations of Bitcoin in the last 24 hours.
Ethereum, the second largest cryptocurrency, was also affected, recording about $217 million in liquidations. Other assets, such as Solana, suffered losses of over 6% in the same period.
Liquidations occur when the price of the asset moves against the positions of leveraged traders, forcing automatic selling of assets to cover losses, which further amplifies selling pressure in the market.
[Global crisis, 'Black Monday' and panic sell]
The macroeconomic environment deteriorated rapidly following the announcement of U.S. tariffs.
Estimates from S&P Dow Jones Indices indicate that the two sessions following the announcement of tariffs wiped out $7.46 trillion in global market value, with $5.87 trillion in the U.S. and another $1.59 trillion in other international markets.
The situation has led many analysts to compare the current moment to historical events such as the Black Monday of 1987 and the financial market crash caused by the pandemic in 2020.
The new tariffs, combined with the expectation of more protectionist measures, generated panic in the markets and contributed to the rapid deterioration of investor sentiment.
[Technical indicators and market sentiment]
In the cryptocurrency market, Bitcoin has lost important support levels, such as the 50-week exponential moving average, currently around $77,000.
The formation of a 'death cross' on the daily chart — when the 50-day moving average crosses below the 200-day moving average — signaled a possible continuation of the downward trend.
On-chain data from CryptoQuant reveals that short-term holders, responsible for more speculative movements, are selling at a loss.
The SOPR (Spent Output Profit Ratio) indicator, which measures whether spent coins are being sold at a profit or loss, fell below 1, indicating that these investors are capitulating.
In addition, the average acquisition cost for these investors remained above the current price of Bitcoin, increasing selling pressure amid widespread fear sentiment.
[Market projects new rate cuts]
The context of instability led to a shift in expectations for U.S. monetary policy. According to the CME Group's FedWatch tool, the market has begun to predominantly bet on a 0.25 percentage point cut in the benchmark interest rate at the next Federal Reserve meeting in May.
Before the recent turbulence, the expectation was that such a move would only occur in June.
The possibility of an emergency rate cut, similar to that adopted during the pandemic, has also gained traction. On platforms like Polymarket, bets are increasing that the Fed will have to act quickly to stem the bleeding in risk markets.
{Bear Market?}
U.S. Commerce Secretary Howard Lutnick confirmed to the press that the announced tariffs will take effect without delays, increasing tension among investors.
Jerome Powell, chairman of the Federal Reserve, stated that it will be necessary to wait to understand the real effects of protectionist measures on inflation and monetary policy.
Analysts like Ki Young Ju, CEO of CryptoQuant, warn that the current bear cycle could extend for at least six months.
He highlighted the divergence between Bitcoin's market value and its realized value — which only takes into account coins that are actually moved — as an indication that the market continues in a downward trend.
Meanwhile, the Fear & Greed index, used to measure the sentiment of traditional investors, reached its lowest level ever recorded, with a score of just 4 out of 100.
Even during critical moments like the collapse of FTX or the COVID-19 crisis, this index had not reached such extreme levels.
In the cryptocurrency sector, the equivalent index was operating at 23/100 this morning, still in the 'extreme fear' zone.
[Upcoming events that may influence the market]
In addition to trade tariffs, the coming days will be marked by the release of inflation data in the U.S. The Consumer Price Index (CPI) will be released on April 10, followed by the Producer Price Index (PPI) on April 11.
The numbers are expected to directly influence the Fed's monetary policy and could serve as catalysts for new movements in financial markets.
With global markets still trying to find a floor after recent declines, analysts recommend caution.
The popular trader Michaël van de Poppe warned that Bitcoin could drop to $70,000 before finding a firmer support. He also suggested that an emergency rate cut may be the only way to contain the collapse of risk asset classes.
Finally, Bitcoin faces a concerning scenario, pressured by both technical and macroeconomic factors.
The drop below $75,000 marks an important turning point in the market, which had been sustaining an upward trend since the beginning of the year.
The combination of U.S. tariff policy, the deterioration of global sentiment, and technical signs of weakening prices contribute to an environment of high volatility and uncertainty.