Bitcoin Price Faces Pressure Amid U.S. Tariffs, Key Support and Resistance Levels to Watch
Bitcoin (BTCUSD) experienced a sharp retreat below the $95,000 mark on Sunday, driven by growing concerns over the potential economic fallout from U.S. tariffs. The latest downturn follows President Donald Trump’s Saturday announcement that the U.S. will impose 25% tariffs on Mexican and Canadian imports and a 10% tariff on Chinese goods, set to take effect on Tuesday. This move has raised fears of inflation, which may limit the Federal Reserve’s ability to cut interest rates, exerting further downward pressure on non-interest-bearing assets like Bitcoin.
Bitcoin’s Decline and Trade Tariff Fears
Since Bitcoin’s record high earlier this year, the cryptocurrency has experienced a 15% drop, marking its third consecutive down day. The recent slump has seen Bitcoin hit a three-week low, though it is still 35% higher from the early-November U.S. election, thanks to optimistic expectations of a strategic Bitcoin reserve and a more crypto-friendly regulatory environment under the current administration.
As Bitcoin battles this pullback, investors are closely monitoring crucial support and resistance levels that could dictate the next big moves for the asset. Below, we delve deeper into Bitcoin’s chart analysis to identify price levels to watch.
Potential Double Top: A Bearish Chart Pattern
Bitcoin’s recent price action has formed a double top pattern, characterized by two peaks at similar levels, which is often a precursor to a downside reversal. This pattern suggests that Bitcoin may struggle to break past the highs established between December and January. Additionally, Bitcoin’s RSI (Relative Strength Index) has shown signs of bearish divergence, with a shallower peak compared to the price action, signaling a waning buying momentum.
Crucial Bitcoin Support Levels to Monitor
1. $92,000 Support Zone
The $92,000 level is a critical area to watch for potential support. This region aligns with an uptrend line dating back to September 2024 and several price points from November to January. Although Bitcoin briefly dropped below this level late on Sunday, it has since managed to reclaim this key support. A break below this level could signal further downside.
2. $87,000 Level: Key Support Zone
If Bitcoin fails to hold at $92,000, the next significant support lies at the $87,000 mark. This area coincides with the bottom of a pennant pattern, formed after the cryptocurrency’s post-election rally. A drop below $87,000 could trigger a larger pullback.
3. $74,000 Level: Critical Long-Term Support
In case of further downside, the $74,000 level becomes an essential support zone. This price point closely aligns with March 2024 highs and late-October peaks. Investors using a buy-and-hold strategy may look for entry opportunities near this critical support level.
Key Resistance: $106,000 Area to Watch
On the upside, investors should keep an eye on the $106,000 level, which is likely to act as a major resistance zone. This area represents the peaks reached in December and January, and a breakout above this level would invalidate the potential double top pattern and could signal a resumption of Bitcoin’s longer-term uptrend.
With global economic pressures and ongoing trade tensions, Bitcoin faces a volatile landscape in the coming weeks. Monitoring the price action around these key levels will be crucial for traders and investors seeking to navigate the market’s potential next moves.
