Bitcoin drops below $80,000 amid macro uncertainty but experts remain optimistic

Bitcoin prices fell below $80,000 on Friday amid stringent tariffs levied by US President Donald Trump, whose election was welcomed by the crypto community, sending prices of the digital asset soaring at the time.

However, the market correction was imminent, according to industry experts. “After an impressive rally that pushed Bitcoin to an all-time high of $109,200, the market has entered a consolidation phase. Such phases are common during bull markets, allowing assets to build momentum for the next rally,” Edul Patel, Co-founder and CEO of Indian crypto exchange, Mudrex, told YourStory.

YourStory had previously reported that Bitcoin prices were expected to undergo some corrections this year.

The ongoing trade wars in the US have also fanned inflationary concerns, which would impact the US Federal Reserve’s decision on rate cuts.

Higher interest rates can trigger sell-offs in risky assets like cryptocurrency, pushing prices BTC down, while inflation causes market uncertainty and impacts investor sentiments.

Moreover, a stronger USD typically exerts downward pressure on Bitcoin and other risk assets, as investors turn to safer and traditional assets. This has been evident in past market cycles.

“With all the tariffs, the consumption in the US will reduce, meaning global exports to the US will reduce, creating a global ripple effect. Dollar will strengthen and hence investments from the US will reduce considerably and there will be more blood in both stocks and the crypto market. Gold and real estate will be a winner in this uncertainty,” said Aishwary Gupta, Global Head of Payments, Polygon Labs.

Moreover, according to Avinash Shekhar, Co-founder and CEO of Pi42, the recent $1.5 billion Bybit hack has also eroded investor confidence in the asset.

Balaji Srihari, Vice President at CoinSwitch echoed the same reason. “The recent Bybit hack may have shaken investor confidence, adding to the selling pressure. Given crypto’s inherent volatility and sensitivity to market sentiment, such events can trigger rapid price movements,” he said.

Following BTC’s trend, “Ethereum has also suffered, dropping to a yearlong low. A massive $106 million liquidation occurred as Bitcoin briefly hit $81,000, triggering further volatility. Investors are optimistic yet in fear whether Bitcoin has found a near-term floor or if more downside is imminent,” Shekhar added.

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‘It’s all part of the cycle’

Despite the plunge in Bitcoin’s prices, experts do not seem to be worried. Most experts YourStory reached out to said the volatility is part of the asset class and the price dip is a natural part of its cycle.

“Historically, such pullbacks have been a natural part of crypto cycles, often preceding phases of accumulation and renewed growth. While the short-term outlook may appear challenging, long-term investors recognise the resilience of Bitcoin, which has consistently rebounded to new highs,” said Paras Malhotra, Business and Operations Head at CoinDCX.

The industry remains largely optimistic. Multinational bank Standard Chartered’s crypto analyst Geoffrey Kendrick told CNBC that he believes Bitcoin will hit the $200,000 mark this year before climbing further up in the coming years.

Moreover, Kendrick said he expects the asset’s price to hit $500,000 during Trump’s presidency.

However, in the immediate term, Trump’s new tariffs on China, Canada, and Mexico have rocked the crypto market.

“A bearish outlook suggests Bitcoin could test $70,000–75,000 and Solana faces stagnation if trade tensions escalate, inflation rises, or risk aversion intensifies,” according to Ryan Lee, Chief Analyst at Bitget Research.

”Conversely, a rebound to $95,000–100,000 is possible if tariffs ease, Trump’s pro-crypto policies materialise, or markets stabilise. The trajectory hinges on China’s response, Federal Reserve actions, and whether Trump’s regulatory support counterbalances macroeconomic headwinds,” Lee added.