Global financial markets have shifted back into risk-off mode after President Donald Trump announced reciprocal tariff increases again in response to a court ruling. This has led several countries to face tariff hikes of 10-15%, underscoring ongoing uncertainty in US trade policy and escalating geopolitical tensions. As a result, risky assets ranging from cryptocurrencies to technology stocks were sold off across the board early last week.
Bitcoin plunged over 5% during Tuesday's trading, falling below $63,000 to a low of $62,964 on 24 Feb before recovering slightly. However, it remained below this critical level, reflecting selling pressure from investors reducing their exposure to risky assets.
Since the start of the year, Bitcoin's price has dropped approximately 27%, and has fallen over 50% from its peak in October last year. Meanwhile, US Spot Bitcoin ETF funds experienced outflows exceeding $200 million in a single day, indicating widespread selling. The total market capitalization of the crypto industry has halved from its all-time high to about $2.2 trillion, according to CoinMarketCap data.
The current shock originated from trade policy uncertainty after President Donald Trump imposed a new 10% import tariff for 150 days under Section 122 of the 1974 Trade Act, which does not require Congressional approval. This followed a US Supreme Court ruling that many tariffs introduced last year were unlawful. Although this rate is lower than the previously announced 15%, markets remain concerned that tariffs could rise further in the future.
This uncertainty compounds an already fragile investment environment affected by Middle East tensions and other geopolitical risks, prompting capital to flow out first from highly volatile assets.
Analysts view this adjustment as a “strategic risk reduction” rather than a permanent withdrawal. However, it highlights the important reality that Bitcoin remains highly sensitive to global financial liquidity and macroeconomic policy. If markets perceive trade policies will tighten financial conditions, digital assets tend to be impacted first.
Other asset markets have also weakened, with spot gold prices down about 1.1%, and Ethereum falling 1.6% to $1,826. This reflects broad selling pressure in the global financial markets during this short period. However, Bitcoin prices remain below $66,500 and face a downward trend line. In the short term, Bitcoin is attempting to establish a base for recovery but faces several key resistance levels. If it fails to hold above the $66,500–$67,200 zone firmly, volatility and downside risk will persist in the crypto market.
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