Bitcoin’s failure to hold above $88,000 raises chance of a liquidity grab below the price range lows as long-term holders are showing new signs of accumulation.
Bitcoin (BTC) tapped $88,700 this week but has since corrected to just below $87,000 on March 27.
The recent rejection from the $88,000 resistance level raises questions about whether BTC price could drop further over the next few days.
Could Trump’s tariffs drive Bitcoin prices lower?
On March 26, 2025, President Trump announced a 25% tariff on all cars and light trucks imported into
the US, set to take effect on April 3. Market participants are concerned this might trigger another sell-off in cryptocurrencies, pushing prices lower.
Key takeaways:
The 25% tariff on automobile imports targets major trading partners like Mexico, Canada, Japan, and Germany.
While Trump touts this as a boon for the American automotive industry, the immediate fallout will likely rattle global markets.
For instance, when Trump imposed tariffs on Canada, Mexico, and China in early March, Bitcoin dropped from $105,000 to $92,000 overnight before partially recovering.
These broader auto tariffs could amplify this effect, especially as markets brace for retaliatory measures from affected nations.
Commenting on the current risk-asset landscape, trading firm QCP Capital emphasized the effects of US President Donald Trump’s trade tariffs, saying that they could escalate trade tensions.
“Any further retaliation from these target economies risks injecting a fresh wave of uncertainty into an already volatile global trade landscape,” it wrote in a Telegram note to investors.
QCP also pointed out that “sentiment remains subdued despite headline-grabbing catalysts” such as GME’s surprise $1.3 billion capital raise for potential Bitcoin purchases.
The only positive catalyst is the steady inflow into spot BTC ETFs, totaling $944.9 million since March 11, adding:
“This presents a telling divergence that reflects the market’s bifurcated institutional conviction.”
Bitcoin could drop further on waning demand
Demand for Bitcoin remains relatively low, implying a decline in risk appetite for potential investors, according to market intelligence firm Glassnode.
What to know:
This week’s onchain report from Glassnode highlights a contraction in Bitcoin’s demand measured by assessing the volume of realized profit and loss locked in by investors.
This provides important information on the sell-side forces occurring across spot markets.
Bitcoin’s combined realized profit and loss volumes have “experienced a major contraction” since the all-time high above $109,000, collapsing by 85% from $3.4 billion to $508 million on March 26.
This metric is now at similar levels seen during the 2024 accumulation zone between $50,000 and $70,00, suggesting a similar demand profile.
