Bitcoin retreats to $85K as US confirms March Canada, Mexico tariffs

Bitcoin (BTC) drifted back to $85,000 at the Feb. 27 Wall Street open as markets digested confirmation of new US trade tariffs.

BTC price sells off as Trump says tariffs will go ahead

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD pulling back from a relief bounce to $87,000 on the day.

This had followed a trip to new 15-week lows near $82,000 into the daily close, with bulls once again running out of steam as US President Donald Trump doubled down on tariffs against Canada and Mexico.

Due to begin on March 4, these “will, indeed, go into effect, as scheduled,” Trump wrote in a post on Truth Social.

Both the S&P 500 and Nasdaq Composite Index opened down as a result, while the US dollar index (DXY) gained 0.6% to cancel out more than a week of downside.

Reacting, trading resource The Kobeissi Letter attributed poor BTC price performance to higher stocks correlation and reduced liquidity.

“Ironically, a lot of it flows back into the US Dollar,” it wrote in a dedicated X thread on the topic. 

“The US Dollar becomes the ‘safest risky asset’ during trade wars because it’s the most ‘stable’ currency.”

Kobeissi added that it was mostly smaller investors rushing for the exit, accounting for the record outflows from the US spot Bitcoin exchange-traded funds (ETFs).

“Bitcoin ETFs have now seen 6-straight daily withdrawals, totaling -$2.1 BILLION. The majority of withdrawals were taken by retail investors,” it confirmed. 

“Liquidity has dropped.”

Bullish Bitcoin monthly close “not looking good”

Bitcoin traders meanwhile sought to identify potential definitive reversal areas for BTC/USD.

Related: Short-term crypto traders sent record 79.3K Bitcoin to exchanges as BTC crashed to $86K

As Cointelegraph reported, a “gap” in CME Group’s Bitcoin futures market is currently a popular target.

“Bitcoin looks determined to close that $77,360 November CME gap, which could intersect with the September 2023 trend line,” popular trader Justin Bennett continued on the topic alongside an illustrative chart. 

“Probably some relief in March from this area, but the monthly chart looks toppy unless $BTC can miraculously close February above $92k. The odds aren’t looking good.”

$92,000 previously marked the aggregate cost basis for Bitcoin speculators, forming part of the floor of a three-month trading range.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.