Bitcoin Price plunged Below $114,000 as U.S. Tariffs Ignite Market Panic

Bitcoin plunged below $114,000 on August 2, caught in a global financial storm triggered by sudden U.S. tariff hikes. Within hours, the world’s largest cryptocurrency shed nearly 1% of its value amid panic selling and record investor withdrawals. Ethereum mirrored the decline, sinking under $3,500, while Solana and Litecoin followed suit. Only XRP defied the trend with a modest recovery. This collapse underscores how geopolitical decisions now dictate crypto’s fate more than technological fundamentals—a harsh new reality for digital asset investors.

Bitcoin Price Technical Breakdown Reveals Market Trauma

Charts exposed the severity of the sell-off. Bitcoin’s price sliced through critical support levels, including the 21-day and 50-day moving averages—key indicators of bullish momentum. The MACD indicator, which measures trend strength, plunged deeper into negative territory, signaling accelerating losses. Meanwhile, the Relative Strength Index (RSI) neared oversold thresholds, confirming overwhelming selling pressure. A surge in trading volume indicated panic-driven liquidations rather than strategic portfolio shifts. CoinDesk data shows this was Bitcoin’s sharpest single-day drop since May, erasing weeks of gains in hours.

Macroeconomic Tremors Rattle Crypto Foundations

The U.S. tariff shockwaves triggered over $800 million in Bitcoin ETF outflows—the highest daily exodus in three months. Ethereum funds saw minor inflows, suggesting some investors sought bargains, but this failed to stem the broader decline. Analysts from Bloomberg and the Federal Reserve Economic Database confirm tariffs disrupt supply chains and corporate earnings, indirectly battering risk assets like crypto. Compounding this, the Global Liquidity Index—which tracks capital flow across financial systems—nosedived alongside crypto prices. When this index falls, investors typically flee volatile markets, starving cryptocurrencies of vital capital.

As tariffs reshape global trade, Bitcoin’s trajectory hinges less on blockchain innovations and more on geopolitical stability—making vigilant monitoring of macro trends essential for weathering future volatility.

Must Know

How did U.S. tariffs specifically affect Bitcoin?
New U.S. tariffs increased global business costs, sparking fears of reduced corporate earnings and supply chain disruptions. Investors rapidly exited risk-sensitive assets, causing Bitcoin’s 1% overnight drop and triggering $800 million in ETF outflows.

Which cryptocurrencies were hit hardest?
Bitcoin and Ethereum led declines, falling below $114,000 and $3,500 respectively. Solana and Litecoin followed downward. Only XRP resisted the trend due to accumulation by large holders.

What technical signals warned of this drop?
Bitcoin broke below the 21-day and 50-day moving averages—critical support levels. Bearish MACD momentum and oversold RSI readings further signaled intense selling pressure.

Could crypto prices recover soon?
Recovery depends on stabilized global trade relations and renewed institutional investment. Until macroeconomic uncertainty eases, volatility will likely persist.

Why did Ethereum ETFs see inflows during the crash?
Some investors viewed Ethereum’s dip as a buying opportunity, reflecting divergent short-term strategies amid panic. However, inflows were minimal compared to Bitcoin’s outflows.