BTC dips testing, short-term trend faces a critical test

This week, the cryptocurrency market experienced intense volatility. BTC quickly retraced from last week’s highs, dropping to around $87,260, still below the latest price of $90,050 provided by user_prompt. During this sharp decline, altcoins suffered even greater losses, with over $860 million in derivative positions liquidated in a short period, of which $780 million were long positions, causing market risk sentiment to spike sharply.

Geopolitical Tensions Rise, Safe-Haven Assets in Demand

This sell-off in cryptocurrencies was not an isolated event. Over the weekend, the Trump administration announced an additional 10% tariff on Denmark and seven European countries, instantly triggering concerns about an escalation of trade wars. Facing rising geopolitical risks, investors’ first reaction was to shift towards safe-haven assets. Gold prices surged, even breaking the $4,600 per ounce mark again, reaching new highs. Meanwhile, cryptocurrencies, as risk assets, were collectively sold off. Coupled with the US market’s light trading on Monday due to the holiday, this further intensified the decline in crypto assets.

Short-term Trendline Broken, Technical Warning Signs Emerge

From the daily chart, BTC has again broken below the short-term upward trendline, a technical signal indicating further downside risk. This week, frequent geopolitical events—Trump’s European tariffs, changes in Iran situation, the Bank of Japan’s rate hike decision, and the dissolution of Japan’s House of Representatives—each could trigger market sentiment swings and further reduce investors’ risk appetite.

Subsequent Risks Difficult to Avoid, Limited Rebound Potential

The market expects that this week, the crypto market will fluctuate around lows, with possible technical rebounds midweek. However, it is difficult to avoid the impact of Japan’s Bank of Japan rate announcement on Friday and the safe-haven sentiment over the weekend. In such an environment, BTC may even retest the $91,000 level, dragging down the entire market. Investors should closely monitor the support strength of the short-term trendline, as a breakdown could trigger a larger correction.