Financial markets reeled on Monday as President Donald Trump reignited fears of a global trade war, triggering a ripple effect that extended into the crypto sector.
Bitcoin, which had shown signs of renewed bullish momentum in recent weeks, fell below $108,000 after Trump issued tariff threats against multiple U.S. trading partners, reviving concerns that have long haunted investors since his return to office in January.
Shortly after noon, Trump released letters addressed to Japan and South Korea warning of new 25% duties, echoing the dramatic tone of his “Liberation Day” speech on April 2.
He accused both countries of unfair trade practices and transshipping goods from other nations to dodge tariffs. The proposed levies are set to take effect August 1, unless renegotiations yield what Trump calls “fairer deals.”
By late afternoon, the list of targeted countries had grown. Trump announced intentions to slap tariffs of up to 40% on goods from Laos and Myanmar, 30% on South Africa, and 25% on Malaysia and Kazakhstan.
The tariffs would be implemented using the International Emergency Economic Powers Act, a move still subject to ongoing court review.
Bitcoin Falls to $107K as Investors Flee Risk on Trump Tariff Delay
The market response was swift. U.S. stocks fell sharply, with the S&P 500 dropping nearly 1%, its worst single-day decline in three weeks.
Japanese automakers were hit particularly hard, with shares of Toyota and Honda down 4.1% and 3.8%, respectively. The dollar surged against the yen and won, as investors sought safer ground.
Bitcoin was not spared. After flirting with an all-time high of $111,814 last week, BTC slid 0.74% in the last 24 hours and is now trading at $107,936.08.
Source: CoinGecko
While the dip may appear modest, analysts say the timing, coming just as equities began tumbling, suggests Bitcoin is increasingly being treated as a risk asset during geopolitical uncertainty.
The crash comes amid rising confusion over the White House’s trade strategy. For weeks, investors had been eyeing July 9 as a critical tariff deadline, set by Trump himself after a chaotic string of announcements in early spring.
But on Monday, White House Press Secretary Karoline Leavitt confirmed the president would sign an executive order delaying that deadline to August 1.
“President Trump is determined to bring reciprocal balance to trade, and the new timeline ensures our partners have every opportunity to reach fair agreements,” Leavitt told reporters.
The delay, however, may only be stoking more uncertainty. Trump has a history of reversing course on trade policy with little notice, making it difficult for investors and foreign governments alike to plan. As White House spokesman Kush Desai put it bluntly, “Any decisions around trade will come directly from the president himself.”
Trump also added a fresh layer of pressure on Sunday, threatening a 10% additional tariff on any country aligning with BRICS policies, a clear swipe at Brazil, Russia, India, and China, whose leaders were meeting in Rio de Janeiro.
Treasury Secretary Scott Bessent sought to calm markets Monday, noting that Trump is focused on “the quality of deals, not the quantity,” but stopped short of naming any countries nearing agreement.
Crypto investors, long accustomed to Bitcoin’s volatility, now find themselves navigating new macro headwinds. Bitcoin’s trading volume rose slightly, up 2.04% to $26.9 billion, as traders responded to the latest geopolitical flare-up.
But with the August 1 tariff deadline looming and trade policy in flux, the path forward remains uncertain.
Bitcoin Futures Rebound, but Price Action Signals Caution
Bitcoin futures markets are showing signs of renewed optimism, with aggregated open interest climbing 7% over the past month, the first sustained increase since BTC’s 12% decline between May and June.
The rise in open interest suggests growing trader confidence, as more capital flows into long positions.
Aggregated Open Interest in Bitcoin Futures. Source: Axel Adler Jr
However, the price action tells a more cautious story. After briefly touching $109,500, Bitcoin has slipped back to around $108,000, forming a double top pattern on lower timeframes, a potential warning sign of hesitation among bulls.
At the same time, net long exposure in Bitcoin futures stands at $27.4 million, remaining in positive territory for over 24 hours. But price remains stuck in a tight range, and analysts are watching key technical levels closely.
Notably, BTC continues to trade above short-term support at the 200-day EMA on the one-hour chart. However, multiple bounces from the $107,300 zone have created a cluster of “equal lows,” an area often targeted for liquidity sweeps.
Bitcoin one-hour chart. Source: TradingView
A break below that level could trigger a stop-loss cascade, potentially dragging the price into a fair value gap between $107,000 and $106,300.
“If buyers fail to step in strongly below $107K, we could see deeper losses toward $105,000,” one analyst warned.
Still, there’s room for upside. A strong recovery from below $107,000 could reignite momentum, especially if buy-side pressure lifts BTC back above $108,000.
More decisively, a clean break above $109,500 would invalidate the downside scenario and open the door for a push toward the $112,000 range.
For now, all eyes are on August 1. Whether it’s the start of another full-blown trade war or just the latest bluff in Trump’s economic playbook, the crypto market, like Wall Street, is bracing for impact.
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