Bitcoin’s price volatility surged to a six-month high this week as macroeconomic uncertainty and aggressive U.S. policy shifts fueled widespread market turbulence. The cryptocurrency’s 30-day volatility index reached 3.6% on March 19, its highest level since August 2024, driven by escalating trade tensions, inflation concerns, and fears of fiscal tightening under the Trump administration. Bitcoin’s price swung between $77,041 and $84,000 in recent weeks, down more than 20% from its January all-time high of $109,590.
The volatility spike coincided with President Donald Trump’s announcement of 25% tariffs on imports from Canada and Mexico, triggering panic selling across risk assets. Analysts linked Bitcoin’s instability to its strengthened correlation with traditional markets, as the S&P 500 erased all post-2024 election gains and the CBOE Volatility Index (VIX) climbed to 30. “The sentiment of economic slowdown dominates the markets, with synchronized corrections across stocks, bonds, and crypto,” said Augustine Fan, head of analysis at SignalPlus.
Further pressure emerged from regulatory uncertainty surrounding Elon Musk’s Department of Government Efficiency, which has saved $115 billion through austerity measures but raised concerns about employment and consumer demand. Federal Reserve officials added to the unease by maintaining interest rates while signaling potential cuts later in 2025, creating a mismatch between fiscal tightening and monetary policy.
Retail traders catalyzed the latest downturn, with Bitcoin’s daily active addresses surging to 882,000 as small investors sold off positions. Nearly $1 billion in leveraged crypto trades were liquidated in 24 hours, including $277 million in Bitcoin long positions. Despite Trump’s pro-crypto stance—including plans for a U.S. Bitcoin reserve—geopolitical risks and manufacturing sector weakness overshadowed bullish signals. The Institute for Supply Management’s Purchasing Manager Index dropped to 50.3 in February, nearing contraction territory.
Market observers warn volatility could persist until clarity emerges on tariffs, inflation, and Fed policy. Greg Magadini of Amberdata noted, “This high-volatility environment will linger until structural economic uncertainties are resolved.” Bitcoin’s price remained sensitive to macro liquidity shifts, with analysts eyeing critical support near $75,000 if selling pressure continues.
Sources:
https://www.ainvest.com/news/bitcoin-volatility-surges-economic-uncertainty-2503/
https://www.standard.co.uk/business/bitcoin-us-economy-donald-trump-ethereum-b1213065.html
Bitcoin Price Analysis: 3 Reasons BTC Plunged 25% to Hit 120-Day Lows in February 2025
https://www.ainvest.com/news/bitcoin-volatility-surges-3-6-policy-uncertainty-2503
https://cointelegraph.com/news/bitcoin-volatility-soars-crypto-reserve-tariff-jitters
