It’s deja vu again for bitcoin bulls, as Monday’s rally to an all-time high didn’t spark FOMO, but rather a rapid pullback. That retreat greatly accelerated in U.S. action late Friday morning after U.S.-China trade war tensions rose.
US President Donald Trump said in a Truth Social post a few minutes ago that he is preparing a “massive increase” in tariffs on Chinese goods in response to China previously imposing controls on exports of rare earth metals.
Following the post, bitcoin fell below $119,000 from $122,000. Ether solarium and XRP joined the rapid decline.
The drop in cryptocurrency prices also affected stocks linked to the sector. Circle (CRCL) fell more than 6%. Robinhood (HOOD), which derives a large portion of its trading activity from cryptocurrencies, fell 5%.
Coinbase (COIN) also lost 5%, while MicroStrategy (MSTR) fell about 3%.
The news also had an impact on traditional markets. WTI crude oil fell nearly 4% below $60, its weakest price since early May. The S&P 500 and Nasdaq fell 1.6% and 1.3%, respectively.
Gold? It rallied more than 1% to support over $4,000 per ounce as the yellow metal once again proved, and not bitcoin, to be the risk-free asset of choice for investors.
At the current $118,800, bitcoin is down about 2% in the last 24 hours and about 6% since hitting a new record above $126,000 just four days ago.
