Trump Tariffs Impact + Rapid Shift in Risk Appetite: Why BTC Fell Below 65,000

Updated: 2026-02-24

1. What Has Happened These Days

In recent days, “tariffs” have become the keyword in global markets:

New developments and reversals in tariff policies: The US announced/enforced a new 10% global tariff (with signals of possibly raising it to 15%), combined with judicial progress regarding the legality of tariffs, leading to a rapid increase in market expectations of trade friction and rising costs. Risk assets are declining simultaneously: Stock markets, cryptocurrencies, and other high-volatility assets are under pressure. BTC prices dropped significantly over the weekend and Monday, briefly falling below $65,000, then further retreating to around $63,000.

“BTC breaking below 65,000 isn’t a big event within the crypto world, but a sudden shift in macro risk appetite.”

2. Why Do Tariffs “Hit” Bitcoin? (Starting from the macro transmission chain)

Many people’s intuition is: tariffs are a trade issue, why would they impact BTC? The core reason is: tariffs change market expectations about future “growth/inflation/interest rates,” thereby altering the entire market’s risk appetite.

1. Tariffs → Rising costs → Increased inflation expectations (or at least more uncertainty)

Tariffs are essentially “additional taxes,” either borne by companies or passed on to consumers. Once the market believes “costs will stay high,” it reevaluates inflation trajectories:

Rising inflation expectations: harder to lower interest rates Or increased uncertainty: funds tend to “withdraw from high-risk assets first, waiting for clarity”

2. Inflation/Uncertainty → Higher US Treasury yields/USD strength → Global liquidity contraction

When markets worry about persistent inflation or tighter policies, common outcomes are:

Higher interest rate expectations (discount rates rise) Stronger US dollar assets (USD appreciates) Both tend to suppress “risk asset valuations”: Higher discount rates: future returns are discounted more heavily Stronger USD: global funds tend to flow back into dollar assets

3. Decline in risk appetite → High Beta assets take the hit first (BTC often falls into this category)

In the short term, BTC is more like a “high-volatility risk asset” (similar to high Beta tech stocks), not a traditional safe haven. When markets shift to risk-off mode, funds tend to:

Reduce holdings in more volatile assets Sell assets with weaker liquidity Assets that rely on “risk appetite” narratives

So you see a “counterintuitive but real” phenomenon: Gold rises, BTC falls — which isn’t contradictory, because their fund attributes differ in the short term.

3. Why Does “Breaking Key Levels” Accelerate the Downtrend? (Crypto’s own accelerator)

The macro trend is the main driver, but BTC’s volatility is often “more intense” due to three accelerators:

1. ETF Capital Flows: Diminishing passive buying weakens the market

Over the past two years, spot BTC ETFs have provided a “structural buy” for BTC. But when ETF outflows persist, passive buying decreases, making the market more sensitive to negative news:

Fewer buyers during declines Rebounds require stronger incremental capital

2. Leverage/Derivatives: Breaking key levels triggers chain liquidations

A common crypto decline pattern is “breaking psychological levels → triggering stop-loss/liquidation → further selling.” When the $65,000 psychological level is lost, many strategies automatically reduce positions:

Exchange forced liquidations Quantitative stop-losses Options hedging leading to passive selling

“Crypto doesn’t fall on news alone, but on ‘position structure’.”

3. Liquidity and Weekend Effects: Thinner order books are easier to break

During weekends or Asian early trading hours, liquidity is lower:

Same selling pressure causes larger price drops Downward moves more easily “pierce through” key supports

4. Parts to Watch Closely

Indicators to monitor

Reasons to watch them

How to interpret

US Dollar Index (DXY)

Risk appetite and dollar strength often switch together

“The stronger the dollar, the harder it is for risk assets to breathe”

10Y US Treasury Yield

A direct reflection of discount rates and financial conditions

“If rates don’t loosen, valuations will struggle to expand”

Gold/Safe-Haven Assets

To judge if a true risk-off environment is underway

“Gold rising while BTC falls usually indicates safe-haven capital flow”

Stock Indices (especially tech stocks)

BTC’s short-term correlation often resembles “Nasdaq high Beta”

“Weak Nasdaq, hard for BTC to rally alone”

Spot BTC ETF Capital Flows

Whether structural buy pressure is “draining out”

“ETF still outflows, so rebounds look more like rebounds”

Funding Rates/Open Interest (OI)

Whether leverage is being liquidated or needs another push

“Cooling funding rates and declining OI suggest deleveraging”

Exchange Net Inflows (On-chain/Exchange data)

Whether there’s genuine selling pressure rather than futures noise

“Large inflows to exchanges suggest potential selling readiness”

5. Three Scenario Analyses

Scenario A: Tariffs continue to escalate, friction widens (more risk-off)

Market features: USD strong, rates hard to loosen, volatility rising BTC’s possible performance: more prone to “downward trend + sharp drops,” with previous lows or key levels repeatedly tested.

“Until risk appetite returns, BTC will struggle to sustain a trend, mostly oscillating wildly.”

Scenario B: Tariffs stay but do not escalate further (uncertainty persists)

Market features: No worsening news, but cautious capital BTC’s possible performance: Range-bound oscillation, with heavier resistance on the upside.

“This isn’t a bull-bear switch, more like ‘macro uncertainty leading to wide-range volatility’.”

Scenario C: Signs of easing (negotiations/exemptions/softening rhetoric)

Market features: Risk appetite recovers, USD weakens or rate expectations fall BTC’s possible performance: More likely to rebound quickly, especially with short covering causing a V-shaped recovery.

“BTC’s rebounds are often not slow climbs but ‘snapbacks’ once sentiment shifts.”

Risk Disclaimer

This article explains macro and market mechanisms and does not constitute investment advice. Cryptocurrencies are highly volatile; control leverage and positions carefully.

Reference Information

Reuters / Financial Times / The Guardian: 2026-02-20, 2026-02-24 Reports on US 10% global tariffs, possible hikes, legal pathways, and market reactions Barron’s / Fortune / Bloomberg / CoinDesk: 2026-02-23, 2026-02-24 Reports on BTC breaking below $65,000, touching around $63,000, and market sentiment and risk appetite