Rising Geopolitical Tensions Affect Bitcoin

Rising geopolitical tensions and global trade disputes are adding pressure to financial markets, impacting Bitcoin as well. The European Union’s recent retaliatory tariffs on U.S. goods may increase market uncertainty, potentially triggering a Bitcoin correction.

At the time of publication, Bitcoin traded at $81k, reflecting a 7% decline in the past week. Alongside this volatility, Bitcoin is experiencing a decline in trading volumes at $43 billion, which represents a 27% drop in just one day.

While the broader uptrend is intact, short-term volatility is likely to keep investors on edge. The European Commission announced on March 12 that it would impose counter-tariffs on $28 billion worth of U.S. goods beginning in April.

Geopolitical Factors Affecting Bitcoin

This decision is in response to the U.S. reintroducing 25% tariffs on steel and aluminum imports. Such moves rekindle concerns about a prolonged trade war, which can weigh on investor sentiment and market stability.

The retaliatory tariffs will impact a variety of products, including steel, aluminum, textiles, home appliances, and agricultural goods. As the trade dispute escalates, financial markets, including cryptocurrencies, may experience increased volatility.

Interestingly, Bitcoin is also trading within a tight range, with $79,000 acting as a key support level and $91,000 as major resistance. Current developments in the trade war could lead to a temporary correction, possibly below $72,000.

Key Technical Levels

Technically, Bitcoin is trading at a crucial price level of $80k, currently serving as a support level. Beyond this, the next support levels are $72k and $66k.

Bearish momentum is evident as the price remains below both the 50 and 200-day moving averages. The Relative Strength Index sits at 39, slightly above the oversold zone, indicating the price might still decline before any change in momentum.

Bitcoin’s mining difficulty, a key on-chain metric, continues to rise despite the market correction, according to data from CryptoQuant, suggesting miners remain confident in the cryptocurrency’s long-term trajectory.

What’s Next for Bitcoin?

Bitcoin’s short-term direction will likely be swayed by macroeconomic conditions, particularly trade war developments and broader market sentiment. Many are observing whether Bitcoin can maintain its position above key support levels or if a deeper correction awaits.

Despite ongoing volatility, long-term fundamentals, such as increasing institutional adoption and mining resilience, suggest that Bitcoin’s bull cycle is far from over. Investors, however, should prepare for further turbulence ahead of the next significant rally.