Bitcoin’s bullish momentum took a sharp hit this week after President Donald Trump reignited fears of a global trade war, sending financial markets and crypto prices tumbling amid fresh uncertainty over US economic policy.
On Monday, Bitcoin fell below $108,000 after Trump threatened to impose sweeping new tariffs on key US trading partners, including Japan, South Korea, Malaysia, Laos, Myanmar, South Africa, and Kazakhstan. The proposed levies range from 25% to as high as 40% and would take effect on August 1 if no “fairer deals” are reached through renegotiations.
In letters sent to Japan and South Korea, Trump accused both nations of unfair trade practices and using transshipping loopholes to dodge existing tariffs. The announcement extended to other nations by late afternoon, escalating market fears of a renewed global trade conflict.
Markets React as Risk Sentiment Shifts
The broader market response was swift. The S&P 500 posted its sharpest single-day decline in three weeks, dropping nearly 1%. Japanese auto giants Toyota and Honda saw shares plunge 4.1% and 3.8%, respectively, while the dollar gained strength against the yen and the won as investors shifted into perceived safe-haven assets.
Bitcoin, which flirted with an all-time high near $111,800 last week, dropped by 0.74% in the past 24 hours, now trading around $107,936. Although the dip may seem modest, analysts note that Bitcoin’s slide in sync with equities shows how it continues to behave like a risk asset during global macro turbulence.
White House Confirms Tariff Delay to August 1
Originally, the White House had set July 9 as the critical date for new tariffs, but Press Secretary Karoline Leavitt confirmed that President Trump will sign an executive order pushing the deadline to August 1.
“President Trump is determined to bring reciprocal balance to trade, and the new timeline ensures our partners have every opportunity to reach fair agreements,” Leavitt said.
Despite this, the delay has only deepened market uncertainty. Trump has a track record of abrupt policy pivots, keeping investors and governments on edge. Adding fuel to the fire, he warned that any country aligning too closely with BRICS nations could face an additional 10% tariff, putting fresh pressure on Brazil, Russia, India, and China.
Treasury Secretary Scott Bessent tried to calm markets, saying the administration remains focused on the quality of deals rather than the quantity, but he did not disclose if any countries were close to striking a new agreement.
Bitcoin Futures and Technical Levels in Focus
While spot prices slipped, Bitcoin futures showed signs of cautious optimism, with aggregated open interest rising 7% over the past month, marking the first sustained uptick since BTC’s 12% drop between May and June.
However, price action on shorter timeframes points to potential weakness. After briefly rebounding to $109,500, Bitcoin retreated again, forming a double top, which analysts say could signal hesitance among bulls. The $107,300 zone has formed a cluster of equal lows, raising the risk of a liquidity sweep if that support fails.
A decisive break below $107,000 could trigger a cascade of stop losses, dragging Bitcoin down toward a fair value gap between $107,000 and $106,300. Some analysts warn that if buyers do not defend these levels, BTC could test the $105,000 mark.
Still, any strong bounce from the current support zone could flip sentiment back in favor of the bulls, especially if Bitcoin breaks cleanly above $109,500, potentially clearing the path to retest the critical $112,000 resistance.
All Eyes on August 1
For now, crypto traders and Wall Street alike are watching Trump’s next move as the August 1 deadline draws closer. Whether the looming tariffs mark the start of another full-blown trade war or another strategic bluff remains to be seen, but one thing is clear: Bitcoin will not be immune to the fallout.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are volatile and risky. Always conduct your research before making any investment decisions.
