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The price of Bitcoin (BTC) plunged 4.5% in just 24 hours, tumbling to $106,750, after former U.S. President Donald Trump announced a proposed 50% tariff on European Union imports, stoking fears of a renewed global trade war.
According to data from CoinGlass, the sudden market shock erased over $638 million in leveraged positions. The downturn began ahead of Friday’s U.S. market open and intensified after Trump’s remarks during a briefing, where he threatened to impose punitive duties unless EU manufacturers relocate to the U.S.
This geopolitical escalation sent shockwaves through both traditional and crypto markets, pushing Bitcoin below the $110,000 psychological level. As of press time, BTC is trading at $108,103, attempting a modest 1.15% rebound during early Asian trading hours.
Key Levels to Watch
Technical traders are closely watching Bitcoin’s Time Price Opportunity (TPO) Chart, which identifies high-volume trading zones. A key support sits at $106,764, a naked Point of Control (nPOC) from May 21—previously a springboard to BTC’s all-time high of $111,866. If this level breaks, $106,017—considered a “poor low” due to double bottom patterns—could be the next turning point.
Conversely, any signs of recovery must overcome the $110,000 resistance, the last major peak, which now serves as a critical barrier to upside momentum.
Volatility Spikes, Open Interest Drops
Implied Volatility (IV) for Bitcoin spiked sharply prior to the drop, flashing a strong sell signal. The downturn also triggered a sharp decline in Open Interest (OI), which dropped $1.87 billion, pointing to a washout of overleveraged positions. This is significant, considering that OI had surged $6.26 billion during BTC’s 9.5% rally earlier in May.
Also Read: Bitcoin Up 50% in 2 Months—Spot Market Buy Orders Dominate, Suggesting Another Wave Up
While the market shows signs of short-term stabilization, analysts warn that lingering leverage and global trade tensions may continue to pressure Bitcoin’s price action in the days ahead.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
