Donald Trump has officially rolled out new import tariffs ranging from 10% to 12.5% on 60 trading partners, accounting for 99% of total US trade. The policy immediately triggered a selloff in the crypto market, dragging Bitcoin down to a three-day low of $64,799 on the Bitstamp exchange shortly after the announcement.
Yet this pressure on Bitcoin was merely one ripple in a broader shockwave hitting all risk assets.
Domino Effect on Equities and Bonds
Wall Street plunged into the red alongside the crypto drop. The Nasdaq composite fell 2.2% to its lowest point in four weeks, the S&P 500 shed 1.2%, and the Dow Jones slipped 507 points. The price decline swiftly triggered a spike in liquidations of leveraged long positions in the derivatives market, as recorded by CoinGlass data.
A dual burden on risk assets emerged from the bond and labor markets. The 10-year US Treasury yield surged to 4.70%. At the same time, weekly initial jobless claims dropped sharply by 22,000 to 187,000 - the lowest level since September 1969. The robust employment numbers dampened market expectations of a Fed rate cut, with the probability of a July rate hike jumping to 40% from just 12% previously, according to the CME FedWatch tool.
Adding to macro market pressures, Brent crude oil touched $100 per barrel for the first time since early June amid escalating tensions with Iran.
Why Use Section 301?
The tariff policy is scheduled to take effect Friday at 12:01 a.m. Eastern Time, replacing a temporary 10% tariff that was set to expire on the same day. Trump exercised authority under Section 301 of the Trade Act of 1974, a departure from the national emergency tactics previously overturned by the Supreme Court.
The US government reasoned that the tariffs are aimed at curbing the inflow of goods made with forced labor. Countries such as Canada, Mexico, the UK, Taiwan, Argentina, and the European Union face a 10% tariff. Meanwhile, a higher 12.5% rate was slapped on China, India, Japan, South Korea, Vietnam, Australia, and New Zealand. Certain sectors received special exemptions, including crude oil, pharmaceuticals, rare earth materials, aircraft parts, and selected food items.
Sell Signals vs. Critical Levels
These macroeconomic shifts have forced market observers to re-evaluate Bitcoin’s trajectory. Crypto analyst Exitpump predicted that the July rally has come to an end, advising traders to close long positions and open short positions as the price broke below $65,000.
On the other hand, analyst Michaël van de Poppe is still eyeing a $73,000 target if bulls can break through resistance. For this scenario, he highlighted the 21-day Moving Average at $64,073 as a critical support level that must be defended. Investors are now caught between following the wave of macro pessimism or betting on technical resilience.
Reported via crypto.news.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
