Bitcoin Faces Pressure as Tariff Uncertainty Returns

The cryptocurrency market is on edge following a recent U.S. Supreme Court decision that struck down emergency tariffs imposed by President Donald Trump last year. In response, Trump swiftly announced new tariffs, intensifying trade tensions. These developments have caused unease in risk asset markets, including bitcoin.

Bitcoin traders are bracing for potential declines. Since the court ruling on Friday, there has been a marked increase in open interest for put options at various strike prices, notably $58,000, $60,000, and $62,000, on the Deribit exchange. This activity suggests that traders are positioning themselves for possible price drops as put options serve as protection against losses.

The market’s reaction has been swift. Bitcoin experienced a dip to $64,481 early Monday, having fluctuated around $66,000 over the weekend. The volatility was exacerbated by reports of a large bitcoin holder transferring substantial amounts to an exchange, likely signaling an intent to sell. Despite this, bitcoin has recovered to over $66,000.

Ether has also seen recovery from lows near $1,856 during the Asian session, even as blockchain data indicated increased sales activity by Ethereum co-founder Vitalik Buterin.

Trade tensions will likely influence market sentiment throughout the week. Nvidia’s upcoming earnings report could add further volatility. As we noted in our recent analysis, geopolitical factors continue to play a significant role in market dynamics.

Analyst Insight: The resilience of bitcoin above $66,000 despite selling pressure suggests underlying buyer demand remains strong in the face of external shocks.

This ongoing uncertainty raises the question: How will investors navigate these turbulent trade conditions in the coming weeks?

Sources: CoinDesk