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Bitcoin Pullback Intensifies as Trump Tariff Threat Compounds Existing Weakness
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despite Donald Trump’s recent threat of increased tariffs on Chinese goods possibly acting as a catalyst, analysts suggest the recent downturn in Bitcoin (BTC/USD) was foreshadowed by concerning technical indicators well before Friday’s market reaction. The cryptocurrency, along with othre crypto assets, experienced a notable pullback, but experts believe underlying weaknesses were already present.
The latest volatility arrives as Trump proposed a 100% tariff on Chinese imports starting November 1, responding to Beijing’s export controls on rare earth minerals. While this proclamation undoubtedly contributed to the downside pressure, a closer look at the price action reveals a more complex picture.
Technical Analysis Reveals Pre-Existing Weakness
According to analysis of BTC/USD charts, topping patterns were evident even before the tariff news broke. Both daily and weekly timeframes displayed signals suggesting a potential reversal of the recent bullish trend. One analyst noted, “Calls for another fast ‘TACO’ turnaround for riskier asset classes might potentially be anything but guaranteed, especially following the scale of the surge seen as markets bottomed in early April.”
On the daily chart, a “shooting star” candle formed last Monday after reaching a new high, followed by a bearish engulfing candle the next day. Subsequent candles leading up to Friday’s decline were characterized by extended upper wicks,indicating increasing selling pressure. This pattern suggested bears were gaining control of BTC/USD prior to the tariff headlines.
momentum Indicators Confirm Bearish Sentiment
Momentum indicators further support this view.The Relative Strength Index (RSI) (14) is trending downward and now sits below 50, signaling a neutral to slightly bearish outlook for short-term price movements. While the Moving Average Convergence Divergence (MACD) remains in positive territory, it has crossed below the signal line, reinforcing the idea that selling rallies may be a more prudent strategy than buying dips in the current environment.
The weekly chart paints a similarly cautious picture. Last week’s “dark cloud cover” pattern signaled a shift in directional risk, opening higher but sharply reversing course by the close. This reversal is compounded by a rising wedge pattern that has been forming over the past six months, potentially foreshadowing a downside breakout. Bearish divergence in the RSI (14) and a bearish crossover in the MACD further solidify the short- and medium-term bearish signals, despite the longer-term trend remaining bullish.
key Levels to Watch for Traders
Traders are closely monitoring key price levels for potential entry and exit points. Sellers demonstrated activity above $124,000 for an extended period last week, establishing a zone of interest for those looking to short BTC/USD or for bulls aiming to reduce existing long positions.
On the downside, the $113,500-$114,000 range is a critical area to watch. This zone represents the 23.6% Fibonacci retracement of the April-October low-high and previously acted as support during multiple tests,including Friday’s decline. Should this level be breached, further support can be found at $107,500 and the psychologically significant $10
