Can Bitcoin Price Lose $110k Support As Trump Proposes 50% Tariff on EU?

As of May 24, 2025, Bitcoin (BTC) is trading at $109,310, reflecting a slight decrease of 0.81% from the previous close. This analysis will delve into whether the $110k support level is at risk, especially in light of hypothetical new economic headwinds.

Stock market information for Bitcoin (BTC)

- Bitcoin is a crypto in the CRYPTO market.
- The price is 109310.0 USD currently with a change of -893.00 USD (-0.01%) from the previous close.
- The intraday high is 110203.0 USD and the intraday low is 107160.0 USD.

Bitcoin's Current Position: A Technical Deep Dive

Bitcoin's price has been on a rollercoaster, driven by a blend of regulatory developments, market sentiment, and broader economic factors. The question on everyone’s mind is whether the $110,000 support level will hold amidst potential challenges.

Recent Price Action

Over the past few weeks, Bitcoin has experienced significant volatility. After breaking through previous all-time highs, it briefly touched levels above $111,000 before encountering resistance. The recent pullback to around $109,310 indicates a consolidation phase, but also raises concerns about a potential further decline. The initial surge was fueled by optimism surrounding regulatory developments and increased institutional engagement. However, profit-taking and uncertainty regarding future economic policies have contributed to the recent price correction. You can follow the current price on Binance.

Technical Chart Patterns

Analyzing Bitcoin's chart, several patterns are worth noting:

Ascending Triangle: Prior to reaching its recent highs, Bitcoin appeared to be forming an ascending triangle pattern on the daily chart. This is generally a bullish pattern, characterized by a series of higher lows forming a rising trendline and a horizontal resistance level at the top. The breakout above the resistance confirmed the pattern, leading to the initial surge. However, the subsequent failure to sustain the breakout and the current pullback raise questions about the strength of this bullish signal.

Potential Double Top: The recent price action near the $111,000 level has created a potential double top formation. This bearish pattern occurs when the price attempts to break through a resistance level twice but fails on both occasions. If the price breaks below the neckline of the double top (typically located at the low between the two peaks), it could signal a significant downward move. Currently, the neckline is around the $107,000 - $108,000 level. A confirmed break below this level would increase the likelihood of further declines.

Flag Pattern: Looking at the shorter timeframe charts (4-hour or hourly), a bearish flag pattern may be forming. This pattern typically appears after a sharp downward move (the "pole"), followed by a period of consolidation within a narrow, slightly upward-sloping channel (the "flag"). A break below the lower trendline of the flag would suggest a continuation of the downward trend. The pole of the flag would be the recent dip from above $111,000.

Key Support and Resistance Levels

Identifying key support and resistance levels is crucial for understanding potential price movements:

Immediate Resistance: $110,000 - $111,000. This area represents the immediate resistance zone where Bitcoin has struggled to maintain its position. A sustained break above this level would be necessary to resume the upward trend.

Next Resistance: $112,500 - $115,000. This area represents the next significant resistance zone, based on previous highs and Fibonacci extension levels. Breaking through this level would indicate strong bullish momentum.

Immediate Support: $107,000 - $108,000. As mentioned earlier, this level represents the neckline of the potential double top formation and serves as an immediate support. A break below this level could trigger further selling.

Next Support: $105,000 - $106,000. This area represents the next significant support zone, based on previous price consolidation and Fibonacci retracement levels. Holding this level would be crucial to prevent a deeper correction.

Strong Support: $100,000. This is a psychological support level. A fall below this could signal a major shift in market sentiment.

Technical Indicators

Analyzing key technical indicators provides further insights into Bitcoin's current state:

Moving Averages: -The 50-day moving average is currently trending upwards and is positioned below the current price. This suggests a bullish trend in the medium term. However, the price is currently testing this moving average, and a break below it could signal a potential trend reversal. - The 200-day moving average is also trending upwards and is significantly below the current price, further confirming the long-term bullish trend. However, it’s distance means it is not as relevant for short-term price action. - A "golden cross" (where the 50-day moving average crosses above the 200-day moving average) occurred a while ago, reinforcing the long-term bullish outlook.

Relative Strength Index (RSI): The RSI is currently around 55, indicating neutral momentum. It’s neither overbought nor oversold, meaning that there is room for the price to move in either direction. A move above 70 would suggest overbought conditions, while a move below 30 would suggest oversold conditions.

MACD (Moving Average Convergence Divergence): The MACD indicator shows the MACD line close to crossing below the signal line, which would generate a bearish crossover signal. This suggests that the upward momentum is weakening, and a potential downward move could be on the horizon. Traders should watch for confirmation of this crossover.

Trading Volume: The trading volume has been relatively high during the recent price surge, but it has declined during the pullback. This suggests that the bullish momentum is waning, and the market may be entering a period of consolidation or correction. An increase in trading volume during a break below support levels would confirm the bearish sentiment.

Fibonacci Retracement Levels: Applying Fibonacci retracement levels to the recent price swing from the lows to the highs, we can identify potential support and resistance levels. The 38.2% retracement level coincides with the $105,000-$106,000 support zone, while the 61.8% retracement level is near the $100,000 level. These levels could act as potential targets for a deeper correction.

Market Sentiment and Fundamental Factors

Recent analyses highlight several factors influencing Bitcoin's price action:

Regulatory Developments: Investor optimism has surged due to the anticipated U.S. regulations for digital assets. The proposed Genius Act aims to establish a framework for stablecoins, leading to over $3.6 billion in inflows to U.S. Bitcoin ETFs this month, the highest since January. (ft.com)

Market Sentiment and Institutional Engagement: Bitcoin's performance often parallels that of tech stocks, which have also rallied, with the Nasdaq climbing 30% from early April lows. Analysts attribute Bitcoin’s rise to greater engagement from traditional financial institutions. Highlights include JPMorgan CEO Jamie Dimon acknowledging client interest in Bitcoin, and Coinbase’s inclusion in the S&P 500. (reuters.com)

These factors suggest a bullish outlook for Bitcoin, supported by regulatory clarity and increased institutional participation.

The "Trump Tariff" Factor

Now, let's consider the potential impact of a hypothetical 50% tariff on EU goods proposed by a potential Trump administration. Such a tariff could trigger a series of events:

-Trade Wars: A 50% tariff would almost certainly provoke retaliatory measures from the EU, leading to a full-blown trade war. This could disrupt global supply chains, increase inflation, and slow down economic growth.

-Risk-Off Sentiment: Trade wars create uncertainty, leading investors to move away from risky assets like stocks and cryptocurrencies towards safer havens like the US Dollar or gold.

-Dollar Strength: Increased demand for the US Dollar as a safe haven could strengthen the dollar, making Bitcoin more expensive for international buyers.

-Reduced Liquidity: Economic uncertainty could lead to reduced liquidity in the cryptocurrency market, making it more difficult for Bitcoin to maintain its price.

-Inflationary Pressure: Tariffs can also cause inflationary pressures as the cost of imported goods rises. While Bitcoin is sometimes seen as an inflation hedge, in the short term, broad economic downturns can overshadow this aspect, leading to selling pressure.

Community and Market Impact

The crypto community and broader market would likely react with a mix of concern and analysis. Initial reactions might include:

Social Media Frenzy: Twitter, Reddit, and other crypto forums would be flooded with opinions, analyses, and predictions. Sentiment analysis tools would be used to gauge the overall mood.

Expert Opinions: Crypto analysts and economists would offer their takes on the potential impact, considering factors like trade balances, inflation rates, and alternative investment options.

Institutional Investor Reactions: Major institutional investors would likely re-evaluate their positions, considering the broader macroeconomic risks. This could lead to significant buy or sell orders.

Potential Trading Strategies

Based on the current technical and fundamental outlook, traders might be considering the following strategies:

Long Positions: Traders who believe that Bitcoin will resume its upward trend might consider entering long positions near the $107,000-$108,000 support zone. They would place stop-loss orders below this level to limit potential losses. The target would be $112,500 - $115,000.

Short Positions: Traders who anticipate a deeper correction might consider entering short positions near the $110,000 - $111,000 resistance zone. They would place stop-loss orders above this level to limit potential losses. The target would be $105,000 - $106,000 or even $100,000.

Range Trading: Given the current consolidation phase, traders might consider range trading strategies, buying near support levels and selling near resistance levels. They would use tight stop-loss orders to manage risk.

Dollar-Cost Averaging (DCA): Long-term investors might continue to use a dollar-cost averaging strategy, buying a fixed amount of Bitcoin at regular intervals, regardless of the price. This strategy can help to mitigate the impact of volatility.

Hedging: Some investors might choose to hedge their Bitcoin holdings by buying inverse ETFs or other instruments that profit from a decline in the price of Bitcoin. This can help to reduce overall portfolio risk.

Short-Term Price Analysis

Considering the current technical setup and market conditions, here's a short-term price analysis:

Bullish Scenario: If Bitcoin manages to hold above the $107,000-$108,000 support zone and break above the $110,000-$111,000 resistance, the next target would be $112,500-$115,000. A sustained break above this level could lead to a retest of previous highs and potentially new all-time highs. This scenario would likely be driven by continued positive news regarding regulatory developments and increased institutional adoption.

Bearish Scenario: If Bitcoin breaks below the $107,000-$108,000 support zone, the next target would be $105,000-$106,000, followed by $100,000. A break below $100,000 could signal a deeper correction towards lower levels. This scenario would likely be triggered by negative news, increased selling pressure, or a broader market downturn. The hypothetical "Trump Tariff" could certainly trigger such a downturn.

Expert Analysis Videos

Here are two recent YouTube videos from reputable sources offering price analysis for Bitcoin:

Video 1: Bitcoin Broke All-Time High — But Don’t Get Comfortable!

https://www.youtube.com/watch?v=_paE1FzCt9A

Video 2: Bitcoin hits a new all-time high above $111K. Here's why.

https://www.youtube.com/watch?v=cWoG-NUNxkg

Conclusion: Navigating the Volatility

Bitcoin's price remains highly volatile and subject to a wide range of factors, including technical patterns, market sentiment, regulatory developments, and broader economic conditions. The hypothetical "Trump Tariff" on EU goods highlights the potential for geopolitical events to significantly impact the cryptocurrency market. Investors and traders should carefully monitor these factors and use appropriate risk management strategies to protect their investments.

It is crucial to conduct independent research, consult with financial advisors, and only invest what you can afford to lose. The cryptocurrency market offers significant potential rewards, but also carries substantial risks.