[Christian Harris]

Bitcoin plunged by up to 6% today, sliding toward $91,000 and marking its lowest level in three weeks, as renewed global trade tensions rattled financial markets.

The sharp decline in the leading cryptocurrency mirrored a broader selloff in risk assets, fuelled by fears of an impending global trade war.

Over the weekend, US President Donald Trump announced a series of aggressive tariff hikes, imposing a 25% levy on goods from Mexico and Canada, alongside a 10% tariff on imports from China.

These measures triggered immediate retaliatory actions from the affected countries, escalating concerns over prolonged trade disruptions.

Investors are now bracing for the potential fallout, including slower global economic growth, rising inflationary pressures, and uncertainty surrounding future Federal Reserve monetary policy.

While markets had previously anticipated further interest rate cuts from the Fed, the prospect of trade-induced inflation may limit the central bank’s flexibility.

The cryptocurrency market, particularly Bitcoin, has proven especially susceptible to this wave of risk aversion.

With high levels of leverage prevalent across the crypto sector, any downward price movement is likely to be amplified, leading to accelerated liquidations and deeper losses.

Furthermore, lingering uncertainty around the Trump administration’s stance on crypto regulations has added to market unease.

Despite earlier promises of pro-crypto policies, tangible support or regulatory clarity has yet to materialise, leaving investors cautious amid an increasingly volatile macroeconomic environment.

As global markets grapple with these heightened risks, cryptocurrencies remain on shaky ground, reflecting broader investor anxiety about both geopolitical instability and the future of digital assets.

Source: Trading Economics

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