How low could Bitcoin go?
To quote Berkshire Hathaway Chairman and CEO Warren Buffett: “I don’t believe anybody knows what the market is going to do tomorrow.”
Still, investors have been searching for answers since Bitcoin’s price started dipping after U.S. President Donald Trump’s inauguration. Amid twists and turns in his trade policy, Bitcoin’s price hit $77,000 two weeks ago, according to the crypto data provider CoinGecko.
Even though the asset's price was changing hands around $88,000 on Tuesday, experts remained split on whether the leading cryptocurrency could face fresh lows again, pointing to the uncertainties surrounding Trump’s on-again, off-again tariffs.
The Trump administration has tried to calm jitters ahead of a key tariff deadline next week, but it’s hard to know exactly what to expect due to the White House’s “haphazard and chaotic” messaging, Carlos Guzman, a research analyst at the market maker GSR, told Decrypt.
Markets have already digested a lot of the uncertainty surrounding Trump’s trade war, he added, but it’s still unclear whether tariffs are a negotiating tool or part of a long-term plan.
As Trump’s team hints at narrower levies than previously feared, Tom Dunleavy, a partner at venture capital firm MV Global, told Decrypt that Bitcoins’s price has bottomed.
“I think we’re at peak negative sentiment right now,” he said. “I think we’re going to get some stuff walked back now that Trump is likely to get some of the things he wants.”
Trump suggested he may have “flexibility” on implementing reciprocal tariffs on Friday, yet he said he’d slap new tariffs on countries purchasing oil from Venezuela on Monday.
Despite Trump’s latest threat, “crypto markets are showing their strongest signs of stabilization since February,” Compass Point analysts Ed Engel and Joe Flynn wrote in a Monday note.
After an aggressive period of selling between November and February, he said Bitcoin’s long-term holders are no longer unwinding positions. A return of inflows into spot Bitcoin exchange-traded funds, with low funding rates for Bitcoin futures, is also positive, they wrote.
“While we expect strong resistance at the 93,000 level, we're becoming more confident that BTC remains in a bull cycle,” Engel and Flynn added.
The Federal Reserve, which can affect risk assets through interest rates, is in wait-and-see mode itself. Last week, the central bank held interest rates steady, as Chair Jerome Powell said it is “going to be very difficult to have a precise assessment” of inflation pressures from tariffs.
Notably, Powell described inflation from Trump’s tariffs as "transitory," meaning price pressures could subside on their own without the Fed necessarily needing to intervene. The Fed also said it would slow the pace of its balance sheet drawdown.
Citing these factors, Bitcoin’s bottom is in, said Arthur Hayes, co-founder and former CEO of the crypto exchange BitMEX, on X, formerly known as Twitter, on Sunday.
A month ago, he predicted that Bitcoin is bound for “goblin town,” but Hayes now sees $110,000 as more likely than a return to $76,500 short-term.
Edited by James Rubin
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