Can markets find respite amid Bitcoin’s dead cat bounce?

Bitcoin has dropped below $76,000 as the market continues to reel from President Trump’s surprise announcement of an additional 50% tariff on Chinese imports. The move has deepened fears of a prolonged global trade war, sending shockwaves across equities, commodities, and crypto. 

After initially bouncing from a year-to-date low of $74,508 to nearly $79,000 earlier in the week, BTC’s renewed decline is raising doubts about the strength of the rebound. Is this a temporary pause or a classic dead-cat bounce before another steep drop?

Recession incoming?

The macro pressure is undeniable. Goldman Sachs and JPMorgan Chase have warned that further escalation in the U.S.-China trade war could tip the U.S. and global economy into recession this year, a scenario already chilling investor sentiment. Stocks took a beating early in the week, with the S&P 500 erasing $2.5 trillion in value before staging a modest recovery to end Tuesday with a 1.57% loss. 

Traditional safe-haven assets like gold and silver were initially caught in the crossfire, tumbling 2.6% and 8%, respectively. And Bitcoin? It fell to a year-to-date low of $74,508 before bouncing back-temporarily fueled by false reports that tariffs might be paused.

That bounce was short-lived. Trump swiftly dismissed the rumors on Truth Social and doubled down: more tariffs are coming if China doesn’t yield. China responded with equally strong language, vowing to “fight to the end.” Amid the confusion, some in the Trump administration were already claiming victory. “It’s finding the bottom now,” Trump’s top trade adviser Peter Navarro said on Fox News Monday night. “It’s going to shift over, and it’s going to be companies in the S&P 500 who are the first to produce here. 

Those are the ones going to lead to recovery. And it’s going to happen. Dow 50,000. I guarantee that, and I guarantee no recession.” That optimism wasn’t echoed by JPMorgan CEO Jamie Dimon, who, in his annual letter to shareholders, warned that the tariffs could raise consumer prices, drag on global growth, and damage the U.S.'s credibility with allies. 

Market volatility opens the door for alternative safe havens

This period of macro stress could ironically lay the groundwork for Bitcoin's next rally. Binance CEO Richard Teng argued that while the recent downturn reflects short-term uncertainty, the long-term thesis for BTC remains intact. He pointed out that many long-term holders continue to see Bitcoin as a resilient, non-sovereign store of value. 

Bitwise CIO Matt Hougan took the idea a step further, citing a recent speech by Steve Miran, Chair of the White House Council of Economic Advisers, who highlighted the distortive effects of the U.S. Dollar’s role as the global reserve currency. Hougan interpreted Miran’s comments as a subtle call for a weaker dollar, noting that any prolonged decline in the USD could buoy Bitcoin due to their historically inverse relationship. “We’ll move from a single reserve currency to a more fractured system,” Hougan wrote, “with hard money like Bitcoin and gold playing a much bigger role than it does today.”

VanEck’s Mathew Sigel echoed the same narrative. He suggests that if tariffs slow GDP growth without triggering a fresh inflation wave, the Federal Reserve might have room to cut interest rates. That would reintroduce the liquidity environment in which Bitcoin has historically thrived. The bond market is already leaning in that direction. 

At one point on Monday, traders were pricing in as many as five Fed rate cuts for 2025-an abrupt shift from the one-or-none stance seen just last week. 

It’s a clear signal that monetary policy expectations are changing rapidly, and Bitcoin could be a major beneficiary if the dollar continues to weaken and risk appetite returns.

Gold reclaims its haven crown-for now

Meanwhile, gold is quietly reclaiming its role as a traditional haven. The precious metal rebounded after a sharp drop at the start of the week and is trading just above $3,000 per ounce. The move is driven by technical positioning and geopolitical concerns, wildly as the China-U.S. tariff conflict spirals further out of control. 

Gold’s bounce also reflects another reality: when fear spikes and uncertainty reigns, some investors still prefer assets with centuries of trust behind them.

Technical analysis: BTC’s dead-cat bounce

In the days ahead, the market’s focus will likely zero in on key Bitcoin levels: $76,600 as immediate support and $85,000 as resistance. Whether BTC breaks out or breaks down will shape the next chapter of its evolving role in the global financial system. For now, this could be a classic dead-cat bounce or the early tremors of a bigger narrative shift.

At the time of writing, bitcoin is finding support around the $76,000 mark. Bearish sentiment is still dominant, as the moving average staying above prices indicates that we are still in a bearish market. However, prices touching the lower Bollinger band indicate oversold conditions. Key levels to watch if prices see a bounce are $80,000 and $83,600. Should the downturn continue, a potential price floor is at $74,500

You can speculate on the price trajectory of the BTCUSD pair with a Deriv MT5 or Deriv X account.