Highlights:
- Bitcoin is pushing lower towards late February lows of $78k
- Correction driven by the high-risk environment created by Trump’s trade war
- Bitcoin could drop further as investors move towards low-risk assets
Bitcoin is in a selloff today, reflecting the selloff across the cryptocurrency market. This reflects the ongoing selloff across the financial markets as investors take a more risk-off approach. At the time of going to press, Bitcoin was down by 9% to trade at $83,609, and bearish momentum continues to accelerate.
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Tariffs Driving the Ongoing Bitcoin Selloff
Late Monday, U.S. President Donald Trump confirmed that the US will impose a 25% tariff on all goods from Canada and Mexico. While speaking at the White House, Trump indicated that there would be no extensions and the tariffs would go into effect today. Market fears have increased because the affected countries have promised to retaliate.
Canadian Prime Minister Justin Trudeau vowed that the decision was unjustified and that Canada would respond. Additionally, China, which constitutes the bulk of goods coming into the US, has moved ahead to impose counter-tariffs of 15% on American goods while also blacklisting some American companies. All this back and forth affects the global economy and Bitcoin, a high-risk asset.
🇺🇸🇨🇦🇲🇽 25% tarrifs on Canada and Mexico start tomorrow. pic.twitter.com/byJBAbtrbI
— Alan (@Alan39982121) March 3, 2025
Crypto Optimism Fades as Nasdaq Signals Trouble – Pushing Bitcoin Price Lower
Bitcoin tends to correlate to the Nasdaq, an index currently sending bearish signals. In late Monday trading, the Nasdaq appeared to trigger a double-top. This trade setup means the selloff that has started is likely to continue in the foreseeable future. According to Econometrics, a cryptocurrency analyst, Bitcoin can only recover when the Nasdaq finds some ground and rebounds. A significant correction could be underway as the Nasdaq drops and Bitcoin comes close to the 200-day moving average support.
Yeah, but that's just, as you said, February. Your graph legend also reveals that over the last year, BTC beat everything else on average.
Your graph is not really backing up your NASDAQ correlation thesis.
— Greg₿ (@greg06061961) March 3, 2025
Trump’s Crypto Strategic Reserve Adds to the Bitcoin Uncertainty
Beyond macroeconomic concerns, Sunday’s announcement of a cryptocurrency reserve also affects Bitcoin. Trump announced that the reserve would include XRP, Solana, and Cardano before adding Bitcoin and Ethereum as an afterthought. This has led to some industry leaders giving adverse opinions about the reserve.
Tyler Winklevoss, co-founder of Gemini, insisted that only Bitcoin meets the necessary criteria for a U.S. reserve asset. In a post on X on March 3, Winklevoss noted that only Bitcoin met the standard for such a reserve. Brian Armstrong, the Coinbase CEO, shared similar thoughts, saying that the reserve should mirror the gold reserve in terms of quality.
I have nothing against XRP, SOL, or ADA but I do not think they are suitable for a Strategic Reserve. Only one digital asset in the world right now meets the bar and that digital asset is bitcoin.
Many of these assets are listed for trading on @Gemini and meet our rigorous… pic.twitter.com/q32qlaFDKJ
— Tyler Winklevoss (@tyler) March 3, 2025
Armstrong also noted that a Bitcoin-only reserve would be much easier for the government to manage. These diverse views by influential voices have removed momentum from the reserve news that saw Bitcoin print a big green candle on Sunday.
Technical Analysis – Bitcoin Price Bears Still In Control
From the charts, Bitcoin is headed towards its February 28 low of $78,143. If bulls push the price through this level, a crash to prices as low as $70k could follow.
On the other hand, if the market rebounded, the key level to watch would be $92,618, which is now resistance. A rally through this resistance could focus on prices above $95k.
Recap
Investors increasingly take a risk-off approach as Bitcoin struggles with broader financial market instability and debates over its role in a U.S. strategic reserve. Bitcoin’s correlation with the Nasdaq suggests that continued market weakness could pressure Bitcoin further.
Additionally, regulatory decisions regarding the composition of the Crypto Strategic Reserve could see Bitcoin drop even further in the short term. As uncertainty grows across the market, the key level for investors to watch will be $80k, as a breach could result in Bitcoin retest prices below $70k.
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