Crypto Market Reacts to Geopolitical Tensions and Federal Policies, Potential for Short-Term Decline

As of today, the crypto market has once again fallen under the influence of global political tensions. US President Trump announced new tariffs up to 15% on China, Turkey, and several other countries. This decision triggered a noticeable sell-off not only in traditional stock markets but also across riskier assets like cryptocurrencies. Furthermore, the looming threat of nuclear conflict has resurfaced in geopolitical discussions. Over the past three weeks, Bitcoin has remained resilient but has now declined to around $114,000, while Ethereum has dropped to $3,570. Daily losses are approximately 3% for Bitcoin and 2.5% for Ethereum. Technically, Bitcoin shows signs of a critical breakdown: after nearly 16 days of horizontal consolidation near the $116,000 level, the support has broken downward. The completion of a 'Head & Shoulders' pattern suggests a test of the $110,000 level. If this support is broken, there could be a short-term decline below $100,000, potentially steering the market toward a capitulation phase before a strong reversal. In a negative scenario, continued US dollar strength, persistent high interest rates, increasing global risk aversion, and ongoing US-Trump tensions, could push Bitcoin down to the $90,000–$100,000 range. Conversely, a positive outlook could materialize if the Fed cuts interest rates in the last quarter of the year, institutional ETF inflows resume, and geopolitical tensions ease, potentially bringing Bitcoin back to $130,000–$140,000. Current market sentiment indicates that short-term investor psychology has been negatively impacted by recent developments. However, this is typical in high-volatility crypto markets. Crucially, the fundamental story remains intact: ETF investments continue, regulatory clarity improves, and institutional capital is still present. Short-term dips should be viewed without panic. Support levels need close monitoring, and macroeconomic news flow has become increasingly influential—technical analysis alone may no longer suffice for positioning. While Bitcoin appears technically fragile, Ethereum's structural resilience is noteworthy. The market's direction will largely depend on Trump’s trade policies and the Fed’s upcoming actions, with key events like the Jackson Hole symposium and inflation data expected to guide future movements. Crypto remains a long-term play. Today's downturns could present future opportunities for strategic investors, but success depends on patience and data-driven decisions rather than impulsive moves.