In a twist that has the crypto world on edge, the probability of Bitcoin’s price plummeting to $75,000 by the end of March has doubled from 10% to a daunting 22%, according to data from Derive’s onchain options market. This stark shift in sentiment comes hot on the heels of renewed trade tensions between the U.S. and its key partners, threatening to unleash a wave of inflationary pressure on the global economy.
Trump’s Tariff Bombshell Rattles Markets
The catalyst for this grim Bitcoin outlook? None other than President Trump’s latest salvo in the ongoing trade disputes. With the imposition of a 25% tariff on Mexican and Canadian imports and a 10% levy on Chinese goods, fears are mounting that this protectionist stance will stoke inflation, complicating central banks’ ability to cut interest rates and support struggling economies.
“The recent tariffs imposed by Trump, including 25% on imports from Mexico and Canada and 10% on Chinese goods, are likely to lead to increased inflation, which could dampen investor sentiment in crypto markets.”
– Derive
As Andre Dragosch, head of Europe at Bitwise, put it bluntly on X: “Tariffs are sending shock waves via USD strength & contraction in global money supply.” The fallout is already being felt, with Bitcoin shedding 11% in just four days to trade at $93,700. Meanwhile, Ethereum, the second-largest crypto, breached the $2,200 mark—its lowest level since early August.
Double Top Spells Double Trouble for BTC
Technical analysts are sounding the alarm over a potential “double top” reversal pattern in Bitcoin’s chart, which could open the floodgates for a steep drop to $75,000. This bearish scenario aligns with the forecast of Arthur Hayes, the former BitMEX CEO who now helms Maelstrom. Hayes believes that BTC is poised for a initial plunge to around $75K before embarking on its next major bull run.
Glimmers of Hope Amid the Gloom
Yet even as storm clouds gather, there are still rays of optimism piercing through. Derive points to the flurry of spot ETF filings for major altcoins like DOGE, SOL, XRP, and LTC from industry heavyweights Bitwise and Grayscale. If given the green light by the SEC, these products could be a game-changer, lending greater legitimacy to the digital asset space and attracting a tsunami of fresh capital.
Another encouraging sign is the growing momentum behind Bitcoin reserve strategies in several U.S. states. This mainstream embrace could further bolster Bitcoin’s standing as a serious financial asset, even in the face of near-term volatility.
“At some point, Fed will need to reignite QE to curb the Dollar from rising further and to stop a continued tightening in financial conditions & deceleration in global growth.”
– Andre Dragosch, Bitwise
Ultimately, many observers believe that the Fed will have no choice but to resume quantitative easing to prevent the dollar from appreciating excessively and exacerbating the global slowdown. Such a pivot could be the catalyst that eventually puts a floor under battered crypto prices.
As the old adage goes, “It’s always darkest before the dawn.” While Bitcoin stares down the barrel of a potential plunge to $75,000, the confluence of spot ETF progress, growing institutional adoption, and the prospect of renewed Fed stimulus offers a glimmer of hope for the long-term trajectory of the world’s leading cryptocurrency. In the meantime, buckle up for what promises to be a wild ride ahead.
