Bitcoin Slightly Recovers After 3% Dip. Is Breakout Imminent?

Bitcoin was on the verge of a massive breakout on Wednesday but halted its uptrend. It surged to a high of $88,563 and retraced as it lost momentum.

News of fresh tariffs swept through the market like wildfire, causing significant selling pressure across several sectors. The US President announced further tariffs on automobiles and other commodities a few days ago, to take effect on April 2.

The new duties came with a fresh twist. Donald Trump imposed tariffs against 180 countries. He claimed the levies were in response to what each nation charged for imports from the US. The latest move has since garnered a lot of reaction from every affected party, including market observers.

Some nations are irritated, while others seek new agreements with the US. The UK and EU responses are generally cautious, claiming they want to avoid a trade war. However, both parties affirmed that reciprocal tariffs are not off the table.

Italy may be one of the worst hit by the levies. Its Prime Minister stated that the United States remains one of its biggest export destinations, with trade rising by over 17% in 2024. The extra duties will weaken Italy’s foothold in this “fundamental” market.

One shocking development was the tariffs on Ukraine and several smaller islands. Nonetheless, the White House claimed the levies were in response to the duties charged on US products.

Slight Reaction From Global Firms and Stocks

Many market analysts predicted that stocks may react negatively to the announcement. This was not the case, as several US companies are seeing significant increases. Large caps like Apple, Nvidia, and Amazon are printing green candles at the time of writing.

However, some analysts warned that the effect of the latest development will gradually happen. They predict the S&P 500 may sink as low as 4,915 points in the coming days.

Bitcoin Reacted Fast

Bitcoin’s reaction was swift. It started Wednesday at $85,171 and surged, hitting a high of $88,563. The apex coin saw a shift in trajectory, retracing after the news of the latest tariffs. It sank below its opening price, dipping to a low of $81,200. The asset slightly recovered but closed with losses exceeding 3%.

BTC tried continuing the uptrend a few hours ago with limited success, surging to $83,900. However, it retraced to its opening price. It retested the previous day’s low but rebounded.

Data from CryptoQuant suggests that the sudden change in price direction is due to a surge in exchange inflow. These trading platforms saw a 400% spike in assets pouring into them. The aSOPR indicates that the coin movement was mostly a selloff, as 3% more traders sold off their holdings in the last 24 hours.

Is Breakout Imminent?

The highlighted data suggests that the apex coin is grappling with significant selling pressure at the time of writing. Investors are yet to recover from the fundamental-induced selloffs. Fear of retaliatory strikes looms, as many fear the US economy may fall into recession. 

The one-day chart shows an ongoing struggle between bulls and bears for dominance. The moving average convergence divergence histogram shows smaller bars as the 12-day EMA and 26-day EMA have yet to diverge. 

Nonetheless, the indicators suggest that a breakout is imminent but remain silent as to the direction. Further slip may send Bitcoin to $80k.

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