On April 7, Bitcoin experienced a significant decline, plummeting almost 7% to reach a three-week low of $77,077.
Bitcoin’s Brief Strength Eroded by Trade War Worries After Trump’s Tariff Reveal
The downturn took place shortly after U.S. President Donald Trump revealed significant new import tariffs, raising fears of a potential trade war and a deceleration in the global economy. Initially, the cryptocurrency market demonstrated some strength last week, as traders considered the possibility of Bitcoin serving as a “safe haven” amid the decline of tech stocks. However, by the evening of April 6, that perspective had changed dramatically.
As U.S. stock futures began trading in the early hours of Asia, the markets experienced a downturn. The Nasdaq 100 contracts declined by 5%, while both the S&P 500 and Dow Jones futures saw decreases of over 4%. The Nikkei 225 in Japan plummeted by 6%, the ASX 200 in Australia fell by 5%, and South Korea’s Kospi dropped by 4.4%, according to data from Yahoo Finance.
Crypto Crash: Bitcoin and Major Altcoins Suffer Significant Losses
Bitcoin experienced a significant decline, mirroring the downturn in stock markets. Data from Coinglass reveals that approximately $778 million in long cryptocurrency positions were liquidated within the last 24 hours, representing the most substantial loss in nearly six weeks. Other prominent cryptocurrencies were also adversely affected, with Solana dropping to a low of $107 and Ethereum decreasing to $1,538, its lowest value since October 2023.
Trump’s recent policy introduces a 10% tariff on most imports, with elevated rates for certain countries, including a 34% tariff on goods from China and a 20% tariff on products from the European Union. This bold action has raised concerns in financial markets, prompting investors to brace for extended economic uncertainty.
As the markets experienced turmoil, “Black Monday” started to trend on X, with users drawing parallels to the notorious crash of 1987, during which the Dow Jones Industrial Average fell by 22.6% in just one day, marking the most significant one-day percentage decline in the history of the U.S. stock market.
Hedge fund magnate Bill Ackman expressed concerns in an April 7 post on X, cautioning that the continuation of Trump’s policies could lead to an “economic nuclear winter.” He stated, “We will significantly harm our reputation with the global community.”
Sentiment within the cryptocurrency community has deteriorated. The Crypto Fear & Greed Index has decreased by 11 points, landing at 23, which indicates a state of “extreme fear.” However, not all perspectives are pessimistic. Arthur Hayes, co-founder of BitMEX, proposed in a post on X dated April 4 that the current turmoil might ultimately lead more investors to consider Bitcoin as a safeguard against centralized policies. Regardless of when this potential surge occurs, Bitcoin’s durability will be put to the test in the coming days.
