Bitcoin has begun a recovery phase after experiencing a sharp decline that took the price below the $80,000 mark. The world’s largest cryptocurrency briefly slumped to a five-month low of $74,409 before showing signs of recovery, as traders stepped in to buy the dip.
As of Tuesday, Bitcoin was trading at $79,673, representing a 3.6% increase in the last 24 hours. The cryptocurrency briefly crossed back above the $80,000 threshold earlier in the day.
The recent price action comes as global markets react to President Donald Trump’s announcement of new trade tariffs on several major economies. These tariffs are set to take effect from Wednesday.
The recovery in Bitcoin prices appears to be tracking similar rebounds in traditional financial markets. Wall Street indexes have recouped much of their Monday losses, while most Asian markets moved higher.
Despite the current recovery, Bitcoin is still nursing a 4.2% drop over the past two days. The cryptocurrency market as a whole has experienced steep losses in recent weeks.
On the technical front, Bitcoin is facing several key resistance levels that could hinder its recovery efforts. There is immediate resistance near the $80,400 level, with a connecting bearish trend line forming at this price point.
The first major resistance is near the $81,500 level, which represents the 76.4% Fibonacci retracement level of the recent decline from $83,680 to $74,409. Should Bitcoin break above this level, the next key resistance would be at $82,500.
A close above the $82,500 resistance might send the price higher toward the $83,500 level. Further gains could potentially push Bitcoin toward the $85,000 mark.
However, if Bitcoin fails to rise above the $80,500 resistance zone, it could start a fresh decline. Immediate support lies near the $79,500 level, with major support at $78,000.
Adding to the bearish sentiment, Bitcoin has formed a “death cross” this week – a key technical indicator that often signals more weakness ahead. A death cross occurs when an asset’s short-term moving average falls below its longer-term moving averages.
In Bitcoin’s case, its 50-day moving average has dropped below its 200-day moving average, confirming the death cross formation. This technical pattern could herald near-term weakness, especially given the lack of directly positive cues for crypto markets.
Further adding to concerns, several long-term holders of Bitcoin have been observed moving coins onto exchanges in recent weeks. This activity often precedes selling and could add additional downward pressure on prices.
The broader cryptocurrency market is also showing signs of recovery, tracking Bitcoin’s bounce. Ethereum, the second-largest cryptocurrency, rose nearly 3% to $1,585.96, recovering from a two-year low.
Other major cryptocurrencies including XRP, Solana, Cardano, and Polygon increased between 7% and 9%. Among meme tokens, Dogecoin added 6.8%.
President Trump has doubled down on his tariff threats, even warning China with steeper duties if Beijing does not withdraw its retaliatory tariffs on the U.S. The President has also threatened tariffs on pharmaceutical and semiconductor imports.
These economic policy shifts have created uncertainty in financial markets, with speculative, risk-driven assets like Bitcoin experiencing heightened volatility as a result.
Market participants are now watching closely to see if Bitcoin can maintain its recovery momentum or if the technical and fundamental headwinds will push prices lower again.
The next few days could be crucial as Trump’s tariffs take effect and market participants assess their potential impact on global trade and investment flows.
