Bitcoin’s red-hot rally slammed into reverse Monday, tumbling below $102,000 as U.S.-China trade tensions cooled. The drop erased gains from a 40% April surge, leaving investors questioning whether the slide marks a temporary pause or the start of sustained weakness. With stock markets soaring on tariff relief, crypto traders now face a critical question: Is Bitcoin losing its momentum?
A $5,000 Drop in Hours
Bitcoin nosedived from $106,000 to $101,300 within 24 hours, its steepest single-day loss since April’s tariff-driven chaos. The sell-off accelerated after Washington and Beijing agreed to suspend tariffs for 90 days, a move that ironically sparked profit-taking rather than celebration. Despite the pullback, prices remain 35% above April’s $74,434 low, a level hit after Trump’s shock tariff announcements rattled markets. “This is classic ‘buy rumours, sell news’ behaviour,” said Kirill Kretov of CoinPanel. “Traders priced in tariff relief early, then cashed out.” Analysts note Bitcoin’s rapid ascent left it vulnerable: Its 40% rally dwarfed the S&P 500’s 12% gain over the same period.
A Risk-On Shift
While Bitcoin faltered, traditional markets surged. The Nasdaq jumped 3.9%, and the S&P 500 climbed 3.1% as tariff fears eased, a stark contrast to crypto’s retreat. The divergence highlights Bitcoin’s shifting role: Once hailed as “digital gold,” it now mirrors volatile tech stocks. “Investors are rotating into undervalued assets,” explained Nansen analyst Aurelie Barthere. “Altcoins and equities suffered heavily during tariff chaos. Now, they’re rebounding.” Data shows Solana and XRP outpaced Bitcoin’s gains post-announcement, suggesting money is flowing to higher-risk bets.
How Politics Fueled the Rollercoaster
Trump’s trade wars have become crypto’s unlikely disruptor. His April 2025 10% universal tariff proposal cratered Bitcoin to $76,000 before the White House paused measures. Markets initially cheered the 90-day freeze, but skepticism soon emerged. “This is a ceasefire, not peace,” warned Kretov. “Miners face hardware cost hikes if China tariffs resume, and inflation risks could return.” Furthermore, Trump’s pro-crypto pledges like easing regulations and backing stablecoins, add layers of bullish uncertainty.
Is Bitcoin a safe haven or a speculative bet?
The asset’s mixed signals deepen its paradox. In April, Bitcoin briefly acted as a haven, outperforming gold during tariff panic. Now, it’s trailing stocks as risk appetite rebounds. “Is it digital gold or a tech stock? Both narratives clash,” noted Barthere. Gold prices dipped 2% post-truce, while silver flatlined yet Bitcoin’s sharper drop suggests traders treat it as riskier. Still, some see long-term promise: Mitrade analysts argue Bitcoin’s 2025 resilience against metals hints at evolving safe-haven credibility.
Technical Warnings
Behind the headlines, charts flash caution. Bitcoin’s volatility sank to 1.88% Monday, a two-month low, as trading volume dried up. “Weak momentum increases rejection risks,” said a CryptoQuant post on X. CME futures gaps loom large, particularly a $91,700 chasm left from April’s rally. Analysts warn these gaps often “fill” during corrections. Furthermore, $100,000 remains critical support: A sustained break could trigger cascading liquidations reminiscent of April’s $250 million long squeeze.
What Comes Next?
Market watchers split on Bitcoin’s path. Bears cite overbought signals and altcoin rotations, while bulls bet on Trump’s regulatory leniency and inflation relief. “Lower tariffs boost liquidity that’s crypto oxygen,” stressed Kretov. “But if talks collapse in 90 days, we’ll replay April’s chaos.” For now, Bitcoin treads water between $100,000 support and $106,000 resistance. A breakout either way could dictate its summer trajectory.
Written By Fazal Ul Vahab C H
