Bitcoin recently reached $88,700 before dropping to just below $87,000, prompting concerns about a potential price decline. The market is reacting to President Trump’s announcement of a 25% tariff on automobile imports, taking effect on April 3, which could lead to increased sell-offs in cryptocurrencies due to heightened global market uncertainty. Historical data shows that similar tariffs previously caused drastic price drops in Bitcoin. Moreover, demand for Bitcoin appears low, with Glassnode reporting an 85% contraction in realized profit and loss volumes, suggesting decreasing risk appetite among investors. Key levels to watch include the 200-day simple moving average at $85,500 and major support around $82,700. Traders are particularly wary, as losing support at $82,000 could lead Bitcoin to test lower levels between $72,200 and $74,500. Overcoming resistance at $88,700 to $92,000 could signal the end of the current downtrend and point towards potential bullish momentum. Overall, the market shows mixed signals as the demand-side forces weaken, while long-term holders anticipate a recovery.

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