Bitcoin has fallen below $65,000 after the Trump administration announced tariffs of 10% to 12.5% on imports from 60 trading partners covering more than 99% of US trade.
Summary
- Bitcoin fell below $65,000 after Trump announced new tariffs covering 60 major trading partners.
- Strong US jobless claims data and rising Treasury yields added pressure on risk assets.
- Crypto liquidations reached around $162 million as leveraged long traders absorbed most of the losses.
CNBC reported that the tariffs will go into effect at 12:01 a.m. ET on Friday, replacing the temporary 10% global tariff scheduled to expire the same day. The Office of the U.S. Trade Representative has linked the measures to what it described as inadequate enforcement of products made with forced labor.
Bitcoin traded as low as $64,985 on Thursday, July 23, before briefly recovering above $65,000. Data from crypto.news showed that the asset fell by approximately 1.5% in 24 hours, with a market capitalization close to $1.3 trillion.
Sales resumed after details of the rate plan emerged, making the rally above $65,000 short-lived. Short range charts showed consecutive bearish candles during the decline, while CoinGlass recorded increasing liquidations of leveraged long positions as traders faced another development of risk aversion.
The rate announcement came in a difficult session for risk assets. The Nasdaq Composite fell about 2.2% to a four-week low, while the S&P 500 lost 1.2% and the Dow Jones Industrial Average fell about 507 points.
Rising tensions between the United States and Iran had already put pressure on Bitcoin earlier in the day. Al Jazeera reported that President Donald Trump had threatened an unprecedented “massive attack” against Iran as military exchanges continued across the region.
Strong jobs data has added pressure on Bitcoin
New U.S. employment data gave traders another reason to reevaluate interest rate expectations. The Labor Department reported that initial jobless claims fell by 22,000 to 187,000 in the week ending July 18, the lowest total since September 1969.
Economists polled by Reuters expected claims to rise to 212,000. Continuing claims also fell by 2,000 to 1.796 million, according to the department, showing that layoffs remained limited despite slower hiring and uncertainty around trade policy.
Stronger jobs numbers may reduce the urgency for the Federal Reserve to ease monetary policy because they suggest the economy can withstand restrictive borrowing costs. Interest rate futures indicated traders were considering the possibility of a Fed rate hike by September, Reuters reported, as higher oil prices raised concerns about inflation.
Treasury yields rose along with those expectations, with the 10-year yield hitting around 4.70%, according to Investors Business Daily. Higher bond yields can impact cryptocurrencies because they increase the yield available on traditional assets that carry less risk than Bitcoin.
Leveraged traders suffered most of the immediate damage from the decline. Data from CoinGlass showed that 62,869 cryptocurrency traders were liquidated within 24 hours, with total liquidations reaching around $162 million. Separate figures from Coinalyze put Bitcoin liquidations near $28.7 million, including approximately $26.2 million in long positions.
Bitcoin’s decline followed a brief advance towards $67,000 earlier in the week. BTC was approaching a seven-week high on July 21 despite the conflict with Iran and the pending tariff decision, but buyers failed to sustain that move as macroeconomic pressure intensified.
New tariffs have rebuilt Trump’s trade barrier
The administration has imposed the tariffs under Section 301 of the Trade Act of 1974, which allows Washington to respond to trade practices it considers unfair. The legal route differs from emergency powers used for a previous set of tariffs that the Supreme Court struck down in February.
A senior administration official described the measures as the most extensive international trade action on labor rights ever taken by a country. According to the administration, the rates depend on how much progress each trading partner has made in restricting imports produced with forced labor.
Countries and territories that have introduced partial restrictions or made related commitments will face a 10% rate. USTR documents show the group includes Canada, Mexico, the European Union, the United Kingdom, Taiwan, Argentina and several Southeast Asian and Latin American economies.
A 12.5% tariff will be applied to partners that the USTR determined had made the least progress, including China, India, Japan, South Korea, Vietnam, Australia and New Zealand. U.S. Trade Representative Jamieson Greer has argued that weak law enforcement abroad forces American workers to compete with goods linked to abusive labor practices.
Several important product groups will be excluded from the new duties. Reuters reported that the exemptions include crude oil, petroleum products, pharmaceuticals, rare earth materials, aircraft parts and some foods, while goods already covered by Section 232 tariffs will not face an additional charge.
Canadian and Mexican products that comply with the United States-Mexico-Canada Agreement will also be exempt. Administration officials said the new steel and aluminum tariffs would not be added to existing national security tariffs.
The USTR has not released an estimate of how much revenue the tariff package will produce, according to CNBC. Trading partners can potentially get lower rates by strengthening their forced labor import rules, although officials said no country currently enforces an outright ban.
For Bitcoin, the announcement has added trade uncertainty to a session already marked by geopolitical tension, rising oil prices, stronger jobs data and higher Treasury yields. Data from CoinGecko placed BTC near $65,000 at the time of reporting, leaving the level as the immediate test for buyers after the latest drop.
