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Bitcoin (BTC) tapped $88,700 this week but has since corrected to just below $87,000 on March 27. 

The recent rejection from the $88,000 resistance level raises questions about whether BTC price could drop further over the next few days.

BTC/USD four-hour chart. Source: Cointelegraph/TradingView

Could Trump’s tariffs drive Bitcoin prices lower?

On March 26, 2025, President Trump announced a 25% tariff on all cars and light trucks imported into the US, set to take effect on April 3. Market participants are concerned this might trigger another sell-off in cryptocurrencies, pushing prices lower.

Key takeaways:

• The 25% tariff on automobile imports targets major trading partners like Mexico, Canada, Japan, and Germany.

• While Trump touts this as a boon for the American automotive industry, the immediate fallout will likely rattle global markets.

• For instance, when Trump imposed tariffs on Canada, Mexico, and China in early March, Bitcoin dropped from $105,000 to $92,000 overnight before partially recovering. 

• These broader auto tariffs could amplify this effect, especially as markets brace for retaliatory measures from affected nations.

Commenting on the current risk-asset landscape, trading firm QCP Capital emphasized the effects of US President Donald Trump’s trade tariffs, saying that they could escalate trade tensions. 

“Any further retaliation from these target economies risks injecting a fresh wave of uncertainty into an already volatile global trade landscape,” it wrote in a Telegram note to investors. 

QCP also pointed out that “sentiment remains subdued despite headline-grabbing catalysts” such as GME’s surprise $1.3 billion capital raise for potential Bitcoin purchases. 

The only positive catalyst is the steady inflow into spot BTC ETFs, totaling $944.9 million since March 11, adding:

“This presents a telling divergence that reflects the market’s bifurcated institutional conviction.”

Bitcoin could drop further on waning demand

Demand for Bitcoin remains relatively low, implying a decline in risk appetite for potential investors, according to market intelligence firm Glassnode.

Related: Bitcoin price prediction markets bet BTC won't go higher than $138K in 2025

What to know:

• This week’s onchain report from Glassnode highlights a contraction in Bitcoin’s demand measured by assessing the volume of realized profit and loss locked in by investors.

• This provides important information on the sell-side forces occurring across spot markets.

• Bitcoin’s combined realized profit and loss volumes have “experienced a major contraction” since the all-time high above $109,000, collapsing by 85% from $3.4 billion to $508 million on March 26.

• This metric is now at similar levels seen during the 2024 accumulation zone between $50,000 and $70,00, suggesting a similar demand profile.

Bitcoin: Absolute realized profit and realized loss. Source: Glassnode

• Sustainable bull markets are typically characterized by consistent and growing inflows of fresh capital entering the network (capital inflow from new investors).

• The difference between long-term holder (LTH) profit taking and short-term holder (STH) loss realization has dropped sharply since the $109,000 record high and returned to a “neutral zone.”

• This means that an equivalent volume of STH losses is now offsetting LTH profits, the report explained, adding:

“This suggests a relative stagnation in new capital inflows, weaker demand-side forces, and a slowing but still meaningful volume of profit taking acting as resistance.”

Bitcoin: Difference between LTH realized profit and STH realized losses. Source: Glassnode

Glassnode concludes that while the STH cohort is dominating losses taken, the LTH cohort is transitioning back into a period of accumulation, which could be a precursor to Bitcoin’s recovery.

“We expect their aggregate supply to grow in the coming weeks and months as a result.”

As reported by Cointelegraph, Bitcoin LTHs continued to hold profits despite the recent sell-off, indicating a strong belief that the bull market rally would eventually resume.

Key Bitcoin levels to watch

Traders are now focused on key areas around the $88,000 level.

Notably:

• Bitcoin's key levels to watch immediately on the downside are the 200-day simple moving average (SMA) at $85,500 and the major support at around $82,700. 

• The first area of interest lies between two recent range lows: $81,138 (formed on March 18) and $76,600 (formed on March 11).

• BTC will potentially target the liquidity cluster around these levels if support at $82,000 is lost.

• An immediate reprieve for the bulls would be a sharp reversal from this range, indicating buying interest below the 200-day SMA.

• If support is lost, BTC could test the next area of interest between $72,200 and $74,500 before filling the fair gap below it toward $70,000.

BTC/USD daily chart. Source: Cointelegraph/TradingView

• The chart above also shows a key resistance zone between $88,700 and $92,000 (where the 50-day and 100-day SMA currently sit).

• Overcoming this barrier would confirm the end of the downtrend as bulls set their eyes on $100,000 and beyond.

Popular analyst Decode said the 20-weekly exponential moving average (EMA) at $88,600 is the “most important level right now for Bitcoin.”

For co-founder of trading resource Material Indicators, Keith Alan, Bitcoin has to reclaim the 2025 yearly open at around $93,300 to confirm a continuation of the bull cycle.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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