Bitcoin fell to $66,450 on April 2 as President Trump’s “Liberation Day” tariff announcement rattled global markets and sent the crypto Fear & Greed Index to 12 out of 100, the lowest reading since early 2024.

The White House announced baseline 10% tariffs on imports from more than 50 countries, with rates potentially climbing to 50% for targeted trading partners. Implementation is set to begin April 5 for most countries, with full reciprocal tariffs kicking in by April 9. Stock markets dropped sharply worldwide, U.S. 10-year Treasury yields slid below 4%, and crypto fell alongside equities as traders cut risk exposure.

A Quarter to Forget

The Liberation Day news capped Bitcoin’s worst Q1 performance since 2018. The asset closed the first quarter down roughly 22%, sliding from its late-2025 highs as the combination of macro uncertainty, fading ETF inflow momentum, and geopolitical tension weighed on sentiment throughout January and February.

The current decline puts Bitcoin about 35% off its all-time high. Total crypto market capitalization stood at $2.37 trillion on April 2, down 4.1% in 24 hours, with DeFi total value locked dropping to $87.2 billion as leveraged positions unwound across major protocols.

The Macro Transmission

The link between tariffs and crypto runs through a few clear channels. Higher import costs push consumer prices up. Stickier inflation gives the Federal Reserve less room to cut rates. Tighter financial conditions reduce the liquidity that has historically flowed into risk assets, including digital ones.

Federal Reserve Chair Jerome Powell reinforced this view on April 4, telling reporters that the administration’s tariff agenda is expected to “raise inflation and lower growth,” and that the Fed would hold rates steady until the picture clarified. That guidance hit markets hard.

Bitcoin’s correlation with the S&P 500 has hovered around 0.55 through the first months of 2026, making it behave more like a high-beta equity than a safe haven during periods of macro stress. When institutional traders reduce exposure to risk assets broadly, Bitcoin tends to follow.

On-Chain Picture

The on-chain data offers a more nuanced read. Long-term holder supply remains stable at approximately 13.8 million BTC, suggesting that coin holders with multi-year conviction are not selling. Daily trading volume came in at $107 billion on April 2, about 32% below its 30-day average, pointing to a market driven by leveraged trader liquidations rather than a broad-based exodus.

Analysts at 21Shares noted that Bitcoin’s network hashrate has reached all-time highs during this period, which strengthens the protocol’s security profile regardless of short-term price moves. Hash rate tends to be a lagging indicator of miner confidence, and its continued climb suggests miners are not yet capitulating.

What Comes Next

A few scenarios are in play. If retaliatory tariffs from China, Mexico, South Korea, and Japan escalate the trade war further, risk assets could face continued pressure. Equity markets set the tone in this regime, and crypto tends to follow.

The more optimistic read focuses on the historical pattern: extreme fear readings have often marked short-term bottoms, particularly when long-term holders are not selling and structural adoption continues. BlackRock’s ETHB staking ETF, launched in March, and the broader pipeline of new crypto ETF products create institutional demand that did not exist in prior downturns.

The $65,800 level, Bitcoin’s 200-day moving average, is the technical line traders are watching. A clean break below that support and a close under $63,200, the February low, would signal a more serious deterioration in market structure. A hold and recovery from this zone would be consistent with the pattern seen after prior macro shock events.

For now, the market is pricing in a trade war that is still developing. April 9, when full reciprocal tariffs are scheduled to take effect, is the next critical date.