- Trump’s 50% tariff proposal caused Bitcoin to drop from $109K to $107,367 within minutes before rebounding to $109,348.
- The BTC 4H RSI dropped to 48.63, signaling weakening momentum and rising bearish pressure.
- Markets now await the EU’s response as the June 1 tariff deadline approaches, raising fears of broader economic fallout.
On May 23, 2025, U.S. President Donald Trump posted on X, demanding a 50% tariff on European Union goods. He claimed EU trade policies had unfairly harmed U.S. companies. Trump cited corporate penalties, monetary manipulation, and lawsuits as key reasons. He added that talks were “going nowhere.”
Trump proposed the tariff would take effect June 1, 2025. He said goods manufactured in the U.S. would be exempt. The tweet caused instant reactions across financial markets, including cryptocurrency.
Bitcoin Drops After Policy Warning
Minutes after Trump’s tweet, Bitcoin (BTCUSD) dropped sharply to $107,367 on Bitstamp. However, it quickly rebounded, climbing to $109,348 at the time of writing. The 4-hour chart shows a brief red candle followed by a strong recovery. This move came with increased trading volume, now at 470 BTC, confirming a surge in participation.
The chart also displays the 50-period Exponential Moving Average (EMA), currently at $106,734. This EMA continues to act as a key support. Bitcoin has consistently held above it since early May. Each correction found buyers around the EMA, reinforcing its importance.
The sharp dip and immediate bounce show how the market absorbed the tariff shock. Although price briefly slipped, buyers quickly pushed it back above $109K. The rejection from resistance near $112,500 remains valid, but the structure still favors bulls as long as Bitcoin stays above the EMA.
RSI Drops Below 50 After Sudden Bitcoin Sell-Off
The 14-period Relative Strength Index (RSI) for Bitcoin has fallen to 48.63 on the 4-hour chart. The RSI had recently touched overbought territory near 75, but the current reading confirms a shift in momentum.
At the same time, the RSI moving average—often used as a trend guide—sits at 66.83. This wide divergence between the RSI and its average signals that the bullish strength has faded quickly. The sharp breakdown reflects increased selling pressure and weaker buyer activity.
If the RSI stays below 50, it will confirm a bearish phase in the short term. Meanwhile, any reversal above 50 could indicate stabilization. Until then, the RSI points to rising uncertainty and potential for more downside in Bitcoin’s near-term trend.
Tariff Threat Extends Market Impact
Trump’s demand for a 50% EU tariff rattled not only crypto. U.S. stock futures also pulled back. According to NBC News, analysts warned of a broader trade war. The threat raised fears of inflation, supply disruptions, and reduced investor confidence.
Meanwhile, European officials have not yet responded. The lack of comment adds uncertainty. Markets now await EU reaction and potential U.S. government response. With June 1 approaching, volatility may increase.
“Harvard got cancelled. Apple got warned. Tariffs are back. Deglobalization flashes red. Trump is still the market’s unhedgeable tail risk,”
wrote Gracy Chen, managing director of Bitget, in a post on X. Her remark summed up market fears, adding weight to investor concerns over rising economic nationalism.
The coming days may bring more swings. If additional tariffs or retaliation are announced, markets could remain unstable. Until then, BTC’s key support at $106,734 remains critical for short-term direction. The recent rebound above $109K shows resilience, but price must stay above the 50 EMA to maintain bullish momentum.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
