Why Is Bitcoin ($BTC) Dropping?
BTCUSDT Perpetual
Price: 109,274.1
Change: -1.37%
Bitcoin recently pulled back after hitting a new all-time high. Here are the key reasons behind the current dip:
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1) Excessive Leverage in the Market
After breaking its all-time high, Bitcoin’s open interest surged to its highest level since December 2024. At the same time, funding rates became overheated — indicating that traders were overly bullish.
This kind of environment often attracts market corrections, as larger players (whales) tend to trigger liquidations by driving the price down, shaking out overleveraged long positions.
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2) Trump’s Tariff Threats
Former U.S. President Donald Trump recently announced plans to impose a 25% tariff on Apple and a 50% tariff on European imports starting June 1st.
This announcement rattled global markets, with stock futures slipping — and Bitcoin, often correlated with risk assets, followed suit.
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3) Hawkish Fed Signals
A recent statement from a Federal Reserve official hinted that interest rates could rise if the U.S. enters a fiscal crisis.
Such remarks tend to spook investors, leading to reduced appetite for high-risk assets like cryptocurrencies.
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Key Takeaway:
Bitcoin’s recent dip is a combination of technical and macroeconomic factors — overheated leverage, geopolitical trade tensions, and interest rate fears. As always, risk management is key in volatile markets.
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