Financial markets experienced turmoil on Monday as President Donald Trump fueled concerns of a global trade war, causing a ripple effect that reached into the cryptocurrency sector.
Following Trump’s threats of new tariffs against various U.S. trading partners, Bitcoin, which had recently been showing signs of bullish activity, dropped below $108,000. This resurgence in trade-related fears has reignited anxieties among investors since Trump’s return to office in January.
In a series of letters dispatched shortly after noon, Trump warned Japan and South Korea of impending 25% tariffs, reminiscent of his stirring “Liberation Day” speech on April 2.
Trump announces tariffs on Japan and South Korea. 25% each.
This is the reward they get for being loyal vassals. pic.twitter.com/udpdduQZHi
— ADAM (@AdameMedia) July 7, 2025
The President accused both nations of engaging in unfair trade practices, including transshipping goods from other countries to evade tariffs. The proposed duties are slated to take effect on August 1, pending any successful renegotiations that Trump insists would yield “fairer deals.”
As the day progressed, the list of countries facing tariffs expanded, with Trump announcing potential levies of up to 40% on goods from Laos and Myanmar, 30% on imports from South Africa, and 25% on products from Malaysia and Kazakhstan.
The tariffs are to be enacted under the International Emergency Economic Powers Act, a decision that remains under review in the courts.
Bitcoin Falls to $107K as Investors Flee Risk on Trump Tariff Delay
Market reactions were swift. U.S. stocks took a sharp downturn, with the S&P 500 plummeting nearly 1%, marking its largest one-day loss in three weeks.
Japanese automakers faced particularly heavy losses, with shares of Toyota and Honda dropping 4.1% and 3.8%, respectively. Concurrently, the dollar strengthened against both the yen and won as market participants sought stable investments.
Bitcoin felt the brunt of the fallout, sliding 0.74% in the last 24 hours, now trading at $107,936.08 after briefly teasing an all-time high of $111,814 just last week.
As reported by CoinGecko, while this decline may seem insignificant, analysts note that the timing aligns with a broader trend of Bitcoin being perceived as a risky asset amid growing geopolitical tensions.
The market’s volatility coincided with growing uncertainty surrounding the White House’s trade direction. A crucial tariff deadline had been set by Trump for July 9, amid a series of chaotic announcements earlier this spring.
However, White House Press Secretary Karoline Leavitt indicated on Monday that the president would sign an executive order pushing this deadline to August 1.
.@PressSec Karoline Leavitt on tariff deadline: “The president will also sign an executive order today, delaying the July 9th deadline to August 1st” pic.twitter.com/jMXn8cCalz
— CSPAN (@cspan) July 7, 2025
This delay could further escalate uncertainty, as Trump has a history of rapidly changing his trade policies with little notice, complicating planning for investors and foreign governments alike. As White House spokesman Kush Desai noted, “Any decisions around trade will come directly from the president himself.”
Adding to the pressure, Trump on Sunday threatened an additional 10% tariff on any nation aligning with BRICS policies, taking aim at Brazil, Russia, India, and China amid their leaders’ summit in Rio de Janeiro.
Treasury Secretary Scott Bessent tried to soothe market jitters on Monday, emphasizing that Trump’s focus is on securing “the quality of deals, not the quantity,” but did not provide specifics on any countries nearing agreements.
Crypto investors, accustomed to Bitcoin’s volatility, are now navigating the turbulence of external macroeconomic forces. As exchanges reacted to the latest geopolitical developments, Bitcoin’s trading volume increased by 2.04% to $26.9 billion.
However, with the August 1 tariff deadline approaching and trade policies in a state of flux, clearer visibility on market direction remains elusive.
Bitcoin Futures Rebound, but Price Action Signals Caution
In the futures market, there are signs of renewed optimism, with aggregated open interest rising by 7% over the past month—the first continuous increase since Bitcoin’s 12% decline between May and June.
This uptick in open interest suggests that trader confidence is improving, with more capital being directed into long positions.
Nevertheless, current price movements convey a more cautious sentiment. After momentarily reaching $109,500, Bitcoin has retreated to around $108,000, which shows a possible double top pattern on shorter timeframes—an indication of hesitation among bullish traders.
Alongside this, net long exposure in Bitcoin futures remains at $27.4 million, staying positive for over 24 hours. However, the price appears to be trapped within a narrow range, prompting analysts to closely monitor key technical levels.
Importantly, Bitcoin continues to trade above critical short-term support levels indicated by the 200-day EMA on the one-hour chart. Yet, recent bounces from around $107,300 have formed a cluster of “equal lows,” an area that is frequently targeted for liquidity sweeps.
Bitcoin one-hour chart. Source: TradingView
A drop below the $107,300 level could initiate a stop-loss cascade, potentially driving prices into a fair value gap between $107,000 and $106,300.
“If buyers fail to step in strongly below $107K, we could see deeper losses toward $105,000,” one analyst cautioned.
However, there remains the potential for upward movement. A significant recovery from below $107,000 could reignite momentum, particularly if buying pressure is able to push BTC back above $108,000.
Crucially, a decisive move above $109,500 could negate the current downside forecast and pave the way for a potential push towards the $112,000 level.
As the August 1 deadline approaches, both the cryptocurrency market and Wall Street brace for potential implications, questioning whether this marks the onset of another expansive trade conflict or simply a strategic maneuver in Trump’s economic playbook.
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