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Bitcoin Drops 22% From High Amid Tariff Shock, Capital Inflows Surge 350%

Coin WorldSaturday, Apr 5, 2025 7:08 pm ET
2min read

Bitcoin is currently experiencing significant selling pressure as bulls struggle to reclaim the $90,000 level, while bears continue to test the $81,000 support zone. The market remains in a tight range, caught between resistance and support, with macroeconomic uncertainty and rising geopolitical tensions adding to the volatility. The latest tariff moves and unpredictable policy direction have only amplified investor caution, particularly toward risk-on assets like Bitcoin.

Despite the ongoing pressure, some key data suggests the worst may be behind. Capital inflows into the crypto market have surged by an impressive 350% over the past two weeks. This sharp increase in fresh capital signals renewed investor interest, particularly from institutions, and could be a leading indicator of improving market sentiment. While Bitcoin still faces resistance and uncertainty, the strength of these inflows hints at growing confidence beneath the surface. If the trend continues, it could help BTC reclaim higher levels and shift the market’s direction. For now, bulls must hold key support and watch for momentum above $90K to confirm the start of a meaningful recovery.

Bitcoin is trading at critical levels as financial markets absorb the shock from the sweeping tariff announcement. The unexpected move has triggered massive selling pressure across global markets, fueling a rise in volatility and uncertainty. Crypto has not been spared. Bitcoin, down 22% from its all-time high, continues to struggle as the broader correction phase that began in January shows no signs of reversing yet. Trade war fears, compounded by ongoing macroeconomic instability, have shaken investor confidence. Traditional markets are seeing increased risk-off behavior, with capital shifting away from equities and high-volatility assets — Bitcoin included. As a result, panic selling and cautious sentiment have driven BTC lower, putting the $81,000 support level in the spotlight.

However, not all signals point to weakness. Top crypto analyst Ali Martinez shared insights showing that capital inflows into the crypto market have surged by 350% in just two weeks. According to on-chain data, crypto capital moved from $1.82 billion to $8.20 billion — a sign of renewed interest from investors and institutions despite bearish price action. These inflows may signal that the market is preparing for a rebound once current macro pressures ease. While Bitcoin remains in a fragile state, capital inflow strength could provide a base for recovery in the weeks ahead.

Ask Aime: What factors will influence Bitcoin's price movement in the coming weeks?

Bitcoin is trading at $83,400 following several days of intense selling pressure and heightened volatility. The recent market shakeup has pushed BTC well below critical resistance zones, with bulls now fighting to reclaim lost ground. One of the most important levels in the short term is $85,500 — a zone that previously acted as strong support and now aligns closely with the 4-hour 200 moving average (MA) and exponential moving average (EMA). Reclaiming this level is essential for any potential recovery. It would signal a shift in momentum and provide bulls with the technical foundation needed to make another attempt at the $88K to $90K range. However, BTC has so far failed to retest or break back above this zone, and continued rejection could lead to further downside.

If Bitcoin cannot reclaim the $85,500 level in the coming sessions, the probability of a deeper retrace grows significantly. A drop below the $81,000 mark — the current support floor — would likely open the door to even lower targets and confirm that the correction phase remains in full effect. With macro uncertainty still looming, BTC’s next move will be critical in shaping short-term market sentiment.

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Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
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