Overview

Bitcoin (BTC) experienced a sharp decline early Thursday, falling to $115,150, down over 3.2% in the past 24 hours. This marks a key retracement after the digital asset recently surged past the $122,000 threshold. The selloff follows a surprise announcement by U.S. lawmakers introducing a broad package of global import tariffs, sparking uncertainty across risk-sensitive asset classes.

As market participants reevaluate inflation risks, economic slowdown concerns, and potential trade retaliation, both traditional markets and crypto assets have entered a risk-off phase. This macro volatility is weighing heavily on Bitcoin, Ethereum, and other major digital tokens, which had been rallying amid improving investor sentiment.

Tariffs Spark Panic: The Policy Shock That Triggered the Pullback

The Biden administration announced a baseline 10% global tariff on imports into the United States, along with a 35% tariff on Canadian goods, effective within 30 days. While the legislation aims to strengthen domestic manufacturing and reduce trade imbalances, investors quickly interpreted the move as a geopolitical escalation that could reduce global growth and hurt liquidity flows.

The ripple effects hit markets almost instantly:

• The U.S. dollar (DXY) spiked nearly 0.6%, dampening dollar-denominated assets.

• S&P 500 futures slipped 0.7%, while Nasdaq futures fell nearly 1.2%.

• Bitcoin, a speculative and liquidity-sensitive asset, became a primary target for profit-taking.

The correlation between macroeconomic policy and digital asset pricing continues to intensify, with institutional investors now adjusting portfolio risk to reflect evolving geopolitical and monetary dynamics.

Crypto Sell-Off Broadens: Ethereum, Solana, and Altcoins Hit Hard

Bitcoin’s decline led a wider selloff across the crypto space:

• Ethereum (ETH) dropped to $3,280, down 2.5% on the day.

• Solana (SOL) plunged nearly 9.5%, falling below $135.

• Avalanche (AVAX) and Dogecoin (DOGE) followed with losses of 7–10%.

Many altcoins that had benefited from bullish momentum earlier in July are now seeing heavier drawdowns as investors rotate capital out of high-beta assets and into cash or bonds.

Crypto-linked equities, including Coinbase (COIN) and MicroStrategy (MSTR), also saw premarket declines of 4–6%, adding to pressure on institutional crypto exposure.

Institutional Activity and On-Chain Trends

Despite the short-term drop, some on-chain data suggests that long-term holders are not yet panicking. According to Glassnode and CryptoQuant, several metrics remain structurally supportive:

• Exchange outflows remain elevated, indicating BTC is being moved into cold wallets.

• Hash rate continues to trend higher, suggesting miners are holding rather than selling.

• The MVRV (Market Value to Realized Value) ratio is still within neutral territory, suggesting the market has room to recover.

However, whale activity has slowed compared to July, when large holders aggressively accumulated BTC around the $108,000–$110,000 range.

Technical Levels to Watch

Technically, Bitcoin’s breach of the $116,000–$118,000 support zone signals short-term weakness. Traders are now closely watching these levels:

• Immediate Support: $112,800 – $113,000
  A break below this could expose Bitcoin to a deeper decline toward $109,000.

• Key Resistance: $118,500
  Regaining this zone would restore bullish bias and attract dip buyers.

Momentum indicators like the Relative Strength Index (RSI) have fallen to 41, while MACD on the 4-hour chart shows a bearish crossover, reinforcing the cautious tone.

Macro Headwinds Intensify in August

Historically, August is a volatile month for crypto and equities due to thinner trading volumes, uncertainty around earnings, and macroeconomic data surprises. The addition of unexpected trade policy measures now complicates this landscape further.

Analysts at Goldman Sachs and Deutsche Bank warn that if other nations retaliate against U.S. tariffs, it could further sour risk sentiment and drive capital into defensive assets like gold and the U.S. dollar.

In contrast, if inflation metrics continue to decline in the coming weeks, some of the macro damage may be offset, supporting a rebound in speculative sectors.

What This Means for Crypto Traders

For short-term traders, volatility is now back on the table, offering both opportunity and risk. The next key U.S. macro data releases—Nonfarm Payrolls and CPI—will be crucial in determining whether Bitcoin can resume its uptrend or faces further downside.

For long-term investors, today’s drop may offer a chance to accumulate at lower levels—provided macro conditions stabilize and ETF inflows resume.

The latest data from Bitwise and Fidelity’s Bitcoin ETFs show modest but consistent buying from retirement accounts and private wealth managers. This suggests the structural adoption of crypto continues despite short-term headwinds.

Conclusion: Correction or Warning Sign?

Bitcoin’s decline below $115,200 is a sharp reminder that macro risks remain deeply intertwined with crypto valuations. While the long-term outlook for digital assets remains positive, especially given institutional infrastructure and regulatory progress, price action in the coming weeks may remain choppy.

Unless Bitcoin can quickly reclaim key resistance near $118,500 and ETF flows stabilize, further weakness toward the $110K range cannot be ruled out. For now, investors are moving cautiously—and the next move will likely hinge on whether global trade tensions escalate or ease.