Bitcoin’s Rally Ends as Market Reacts to Trade Tensions

• BTC surged to $112K but lost strength after tariff updates hit global trade confidence.
• Market data shows wallet activity dropped sharply after policy announcements from Trump.
• Trump’s 50% EU tariff threat feels like a market play, offering insiders a trading edge.

Bitcoin soared to a record-breaking $112,000 on May 22, but within hours, macroeconomic headwinds halted the rally and triggered a sharp correction. According to Santiment, BTC price activity hit 109K on May 26 after rebounding from an April low near 73.7K. The digital asset’s strong performance faltered after President Donald Trump announced 50% tariffs on European imports and 25% on Apple products. This unexpected policy development coincided with a decline in Bitcoin’s address activity, resulting in a drop to around 105K by May 24.

Gold Gains as SPX Weakens and BTC Wavers

While Bitcoin reacted to policy shifts, gold moved calmly, rising from around $2,800 to $3,336 between March and late May. On the other hand, the SPX had lasting difficulties and dropped from 6,207 in February to below 5,063 in mid-April. It then slowly gained momentum, trading at 5,802 in late May.

According to Santiment, the movement of Bitcoin into and out of wallets shifted frequently throughout the quarter. Activity fell from its February peak of 101K to just over 78K in March before climbing back up by the end of May. During the tariff news cycle, trader behavior followed familiar patterns, strong optimism often preceded price drops, while bearish sentiment typically signaled an incoming rebound or recovery.

Euphoric Highs Followed by Abrupt Market Jolt

Between May 20 and 21, crowd sentiment surged as Bitcoin approached its all-time high, the on-chain activity climbing above 111K. Santiment pointed this out as a historically overbought zone, often followed by market corrections. Soon after, EU tariff announcements disrupted the bullish trend, triggering panic selling and a rapid price retracement. Wallet activity dipped to 107K on May 23, historically seen as a favorable zone for entries.

Additionally, market observers noted weird behavior between the BTC price and crowd sentiment during this period. Just hours after Trump unveiled the tariffs, the stock market turned around, proving it reacts quickly to political news. For the next few days, Bitcoin’s trades ranged between $105,000 and $109,000, indicating that it had briefly reached stability.

Related: Bitcoin Surges as Global M2 Liquidity Soars to Record Levels

Can Bitcoin Regain Its Momentum, or Will Tariff Fears Dominate?

According to Santiment, Bitcoin is currently influenced by whether policy concerns come back or traders keep their participation on the sidelines. Economist Peter Schiff stated on X that the tariff move was market manipulation, likely aimed at helping insiders profit before the downturn hit.

Bitcoin’s ongoing rise above $ 108K is evidence that its popularity remains strong, even if opinions remain mixed. How policies develop and how institutions respond may now determine the direction of the broader cryptocurrency trend.

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