The price of Bitcoin and many other cryptocurrencies has just plunged to new lows over the weekend as the fallout from President Trump's reciprocal tariffs sends the global economy into disarray.

On Monday, Bitcoin price dropped by 4% to $76,353.71, according to Coin Metrics. This marks a sharp decline from its recent high of nearly $85,000 on Friday and leaves cryptocurrency down almost 30% from its all-time high in January. The price of Bitcoin is currently sitting at about 28% from its January peak.

While on paper, the drop might be not that significant, but investors are saying that they are bracing for heightened financial market volatility following the rollout of President Donald Trump's restrictive global tariffs and the significant pressure of a global recession intensifies.

Similar to Bitcoin, other major cryptocurrencies have also been hit hard. Ether and Solana’s token extended their two-day losses to 15% and 13%, respectively.

Trump's tariff triggering a wave of liquidation

Over the weekend, rattled investors were quick to offload the cryptocurrency on their hand to avoid further market carnage. Since Trump announced his retaliatory tariff, it has fueled fears of the global economic slowdown, prompting investors to take a more conservative stance by selling off riskier assets, such as cryptocurrencies.

Will Clemente, an independent investor and former cofounder of Reflexibity Research, believed that while we might be closer to the end of the correction for Bitcoin, investors seem to be anticipating further global market fluctuations after Trump's tariff raised recession fears in the U.S in particular.

From the beginning of the year, experts have noticed that Bitcoin has rather consistently hovering around the $80,000 mark with brief dips below this level amid market volatility. Just last week Bitcoin showed resilience by remaining relatively stable while stocks tumbled and even gold saw declines. But this strength may be temporary.

According to Clemente, recent market activities reinforce the idea that investors continue to view Bitcoin as a risk-on beta asset-one that tends to move in tandem with, or even more aggressively than, traditional equities during a period of market optimism.

But he notes that Bitcoin's relative strength observed in the latter part of last week was likely not a sign of independent momentum, but rather a case of the cryptocurrency lagging behind a broader equity rally. But he feels that if the equity markets experience a relief bounce, Bitcoin is likely to follow suit.

The recent drop also triggered a wave of long liquidations as traders betting on Bitcoin’s price increase were forced to sell their assets to cover losses. In the past 24 hours alone, Bitcoin saw more than $412 million in long liquidations, while Ether recorded $348 million in liquidations during the same period, according to CoinGlass data.

Bitcoin could benefit from the geopolitical events

Investors have anticipated a Bitcoin correction since early this year when it reached its record high of $109,350.72 amid soaring stock market valuations. Joel Kruger, market strategist at LMAX, noted that the potential for a pullback was “evident” at that time. Clemente also pointed out that Trump’s policies were clearly going to drag on the economy and likely trigger a correction with valuations near record highs by February.

As market turmoil continues, Bitcoin is now testing the critical $74,000 level — its peak from 2024 — as a potential support level. However, some analysts warn that further declines could be on the horizon. Tracy Jin, COO of crypto exchange MEXC, suggested that Bitcoin could fall as low as $68,000 if bearish sentiment persists.

Despite short-term challenges, some experts believe Bitcoin could benefit from broader geopolitical trends over the long term. Will Clemente argued that rising deglobalization and geopolitical tensions favor a “decentralized, open-source, neutral, scarce reserve asset like Bitcoin.”

Similarly, Geoff Kendrick, Standard Chartered’s head of digital assets, noted that Bitcoin could emerge as a hedge against tariff risks and U.S. isolationism. He stated that these factors increase risks associated with holding fiat currencies and could ultimately drive demand for Bitcoin as an alternative asset class.

While Bitcoin faces immediate headwinds from global economic uncertainty and tariff-related fears, its long-term potential as a hedge against geopolitical risks remains a key narrative among bullish investors.