Bitcoin's Sell-Off During Tariff Trade War: Is It No Safe Haven After All?

Bitcoin's BTC/USD sharp decline has sparked renewed debate: is Bitcoin truly a risk asset, or is it evolving into a safe haven?

What Happened: Prominent Bitcoin investor Scott Melker analyzed the price action in his “Macro Monday” podcast, joining a panel of financial analysts that dissected the crash triggered by President Trump's aggressive tariff announcements.

Sunday and Monday were described as "some of the worst market days in history," with equities and crypto both taking major hits.

Mike Mloone warned that a correction was long overdue, even going as far as predicting a potential fall to $10,000 for BTC due to excessive equity valuations.

Dave Weisberger argued the sell-off was driven by forced liquidations, with nearly $500 million wiped out in a short window.

James Lavish, however, defended Bitcoin's long-term thesis, pointing to the inevitability of more monetary expansion and debt accumulation: "The entire system is built on debt. Bitcoin is still the safe haven — just not always in the short term."

Geopolitical Context

The panel also touched on Trump's trade policy, suggesting the former president's push to address imbalances and national debt might spook markets, but are unlikely to lead to meaningful budget cuts without massive political fallout.

The broader takeaway: economic instability is growing, and investors are now re-evaluating what constitutes a "safe" asset in a landscape of macro uncertainty.

Also Read: Raoul Pal Says Crypto Market Nowhere Near COVID-19 ‘Peak Fear’

What's Next: In a podcast published on Tuesday, crypto analyst Benjamin Cowen said Bitcoin's correction could be the defining moment of the 2024–2025 cycle. Here's how he breaks it down:

• Bullish Scenario: If Bitcoin holds the $70,000 range—like how it dipped below prior cycle highs in 2017—it could maintain its bullish market structure. A brief dip to around $69,000 would be acceptable.
• Bearish Scenario: A drop into the low $60,000s could lead to a “macro lower high” on the rebound, potentially marking the end of the bull market.

Cowen also compared this setup to the S&P 500's 1998 rejection, warning that this could signal a shift in Federal Reserve policy. The upcoming May 7 Fed meeting could be a key catalyst. He also pointed out that mid-April has historically marked major turning points in crypto cycles.

Read Next:

• Millionaire Crypto Trader Reacts To Bitcoin Mega-Crash: ‘You Have Only One Job Here: Survive’

Image: Shutterstock