Bitcoin Price Slips 5% Amid Tariff Scare, Here’s What Happened Behind The Scene

The largest digital asset, Bitcoin (BTC) price has dropped by over 5% since the start of this new month.

This drawdown comes after new U.S. tariffs were announced by President Donald Trump.

The news led to a broad market sell-off as it raised concerns about inflation and uncertainty around interest rate policy.

Tariff Announcement Sparks Bitcoin Sell-Off

Bitcoin price fell from $118,920 to $114,000 on Friday after President Donald Trump introduced a new round of import tariffs.

The tariffs, ranging between 10% and 41%, caused traders to worry about higher costs, which could push inflation up again.

Essentially, higher inflation would make it harder for the Federal Reserve to cut interest rates.

That concern caused investors to pull back from riskier assets like Bitcoin, often seen as one of the more volatile investments.

Data from CryptoQuant showed that $195 million in long positions were liquidated during the drop.

In addition, 21,400 BTC were moved by short-term holders to exchanges, most of whom sold at a loss.

This behavior often shows that traders are cutting their losses, expecting prices to fall further.

It is worth mentioning that Bitcoin tends to struggle around this time of year.

In 8 out of the past 12 years, prices have fallen in both August and September. The current move fits that seasonal pattern.

Traders Watch Key Bitcoin Price Levels

It is important to mention that as Bitcoin dipped, analysts pointed to several important price levels to watch.

On-chain data shows the next support near $111,600. This is a level where many investors bought in the past, so it may hold if the price drops further.

Technical traders also noted $112,000 as a key mark. This was Bitcoin’s old all-time high and could act as another line of support.

Below that, the trader realized the price sits at $105,500. This is the average cost basis for active traders in the market.

Based on market perception, if Bitcoin falls through these levels, it could lose ground quickly.

There is not much historical trading volume in lower ranges, so prices may move faster in either direction.

It is worth mentioning that at the moment, Bitcoin price is sitting on what some call a support cluster.

If it holds, the price may stabilize. If it breaks, the next few days could be more volatile.

MicroStrategy and Saylor’s Amplified Bitcoin Bet

It is worth noting that even with the recent pullback, some large investors remain committed to Bitcoin.

One of the most well-known is Michael Saylor, Executive Chairman of Strategy Inc.

Over the years, his company has spent billions buying Bitcoin and now holds a large position.

Interestingly, in his latest post on X, Saylor called Bitcoin “a swarm of cyber hornets,” referring to its structure and strength.

His company is known for its aggressive approach, often described as “amplified Bitcoin.”

This means MicroStrategy’s stock tends to move more than Bitcoin itself because of its holdings and financial strategy.

A recent post from Strategy explained how the firm’s model works.

According to the post, the firm uses steady Bitcoin growth and a dividend approach to try and beat normal BTC returns.

More importantly, over the past several years, the company’s stock has largely outpaced Bitcoin’s price per percentage gains.

This approach has also led to new investment products through which the firm tracks Bitcoin price.

These options offer more exposure to Bitcoin without holding the asset directly, but they also carry more risk.

Even in a weak market, interest in these products shows that many are still finding new ways to back Bitcoin.