Rising geopolitical tensions and global trade disputes are adding pressure to financial markets, and Bitcoin is also affected. The European Union’s latest retaliatory tariffs on U.S. goods could fuel market uncertainty and trigger a Bitcoin correction.
At the time of this publication, Bitcoin traded at $81k after a 7% decline in the past week. Beside the volatility, Bitcoin also faces a decline in trading volumes at $43 billion, representing a 27% drop in the past day.
While the broader uptrend remains intact, short-term volatility could keep investors on edge. The European Commission announced on March 12 that it would impose counter-tariffs on $28 billion worth of U.S. goods starting in April.
Geopolitical Factors Affecting Bitcoin
This decision comes in response to the U.S. reintroducing 25% tariffs on steel and aluminum imports. The move reignites concerns of a prolonged trade war, which could weigh on investor sentiment and market stability.
The retaliatory tariffs will affect a wide range of products, including steel, aluminum, textiles, home appliances, and agricultural goods. As the trade dispute escalates, financial markets, including cryptocurrencies, may see heightened volatility.
Interestingly, Bitcoin is also trading in a tight range, with $79,000 acting as a key support level and $91,000 serving as major resistance. The latest trade war developments could now lead to a temporary correction, potentially below $72,000.
Key Technical Levels
Technically, Bitcoin is trading at an important price level of $80k, which currently acts as a price support level. Beyond this point, the next support levels are $72k and $66k.
The bearish momentum is also highlighted as the price remains below the 50 and 200 moving averages. Additionally, the Relative Strength Index is at $39, meaning it is slightly above the oversold zone, and the price could still drop downwards before any change of momentum.
Bitcoin’s mining difficulty, a key on-chain metric, continues to rise despite the market correction, according to data from CryptoQuant, suggesting that miners remain confident in the cryptocurrency’s long-term trajectory.
What’s Next for Bitcoin?
Bitcoin’s short-term trajectory will likely be influenced by macroeconomic conditions, including trade war developments and broader market sentiment. The market is watching whether Bitcoin can hold above key support levels or if a deeper correction is in store.
While volatility remains, long-term fundamentals, including increasing institutional adoption and mining resilience, suggest that Bitcoin’s bull cycle is far from over. Investors, however, may need to brace for more turbulence before the next major rally.
This article was written by Jared Kirui at www.financemagnates.com.
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