Will the price of Bitcoin continue to plummet?

Bitcoin (BTC) reached $88,700 this week before adjusting down below $87,000 on March 27. The inability of BTC to maintain above the resistance level of $88,000 raises the question of whether the price could continue to weaken in the coming days.

Four-hour chart BTC/USD | Source: TradingView## Could Trump's tariffs put pressure on Bitcoin prices?

On March 26, 2025, President Donald Trump announced a 25% tariff on all imported cars and light trucks into the U.S., set to take effect on April 3. This move has raised concerns among investors about a potential sell-off in cryptocurrency, driving Bitcoin prices lower.

Key points:

• This tariff measure directly affects major trading partners such as Mexico, Canada, Japan, and Germany.
• Although Trump sees this as a boost for the American auto industry, the immediate impact could shake the global market.
• When Trump imposed tariffs on Canada, Mexico, and China in early March, Bitcoin plummeted from $105,000 to $92,000 overnight before recovering partially.
• New tariffs could exacerbate this trend, especially if affected countries retaliate.

QCP Capital trading company warns that Trump's tariff policy could escalate trade tensions:

"Any retaliatory actions from the affected economies could escalate instability in an already volatile global trade environment."

Although the market is witnessing important stimulating factors such as GameStop (GME) unexpectedly raising $1.3 billion potentially to buy Bitcoin, QCP still believes that market sentiment has not significantly improved. The only bright spot is the inflow of funds into spot Bitcoin ETFs, totaling $944.9 million since March 11.

Bitcoin may drop further due to weak demand

According to Glassnode's analysis, demand for Bitcoin remains low, reflecting a decrease in risk appetite among investors.

Key points:

• Glassnode's on-chain report indicates a decline in Bitcoin demand, measured through the volume of realized profits and losses of investors.
• From the all-time high of over $109,000, the total realized profit and loss has decreased by 85%, from $3.4 billion to $508 million as of March 26.
• This index is currently at a level equivalent to the accumulation phase in 2024 (around $50,000 – $70,000), indicating a similar demand pattern.

The actual absolute profit and actual loss of Bitcoin | Source: Glassnode* Sustainable growth markets are typically characterized by a continuous influx of new capital, but currently, this trend is weakening.

The report also emphasizes the narrowing gap between the profits of long-term holders (LTH) and the losses of short-term holders (STH), which has decreased significantly to a neutral level, indicating a balance between the selling pressure from STH and the buying pressure from LTH. Glassnode concludes:

"We expect that the supply of Bitcoin held by long-term investors will continue to increase in the coming weeks and months."

Important Bitcoin Levels to Watch

Traders are currently focusing on key price levels around the $88,000 region.

Support level:

• 200-day moving average (SMA) at $85,500.
• Important support around $82,700.
• Two recent lows at $81.138 ( formed on 18/3) and $76.600 ( formed on 11/3).
• If it loses support at $82,000, Bitcoin could drop to the range of $72,200 – $74,500 before testing the $70,000 level.

BTC/USD Daily Chart | Source: TradingView### Resistance Level:

• The $88,700 – $92,000 zone, where the 50-day SMA and 100-day SMA converge. If Bitcoin surpasses this zone, the downtrend may end, paving the way for a new rally above $100,000.
• Decode analyst states that the 20-week EMA at $88,600 is currently the most important level for Bitcoin.
• Keith Alan, co-founder of Material Indicators, believes that Bitcoin needs to regain the opening level of 2025 at $93,300 to confirm the continuation of the bullish cycle.

Disclaimer: This article is for informational purposes only and is not investment advice. Investors should do their own research before making decisions. We are not responsible for your investment decisions.

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Mr. Teacher

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