Bitcoin (BTC) Drops After U.S. President Donald Trump Posts on X, Demanding a 50% Tariff on European Union Goods

On May 23, 2025, U.S. President Donald Trump posted on X, demanding a 50% tariff on European Union goods. He claimed EU trade policies had unfairly harmed U.S. companies.

U.S. President Donald Trump on Monday announced on X, formerly known as Twitter, that he would be placing a 50% tariff on all goods from the European Union, beginning May 1.

The president's tweet comes as part of his administration's ongoing effort to reduce the U.S. trade deficit and protect American jobs. Trump has repeatedly accused the EU of engaging in unfair trade practices, such as imposing excessive corporate penalties, manipulating currency to gain a trade advantage, and filing frivolous lawsuits.

“We are down 500 Billion Dollars in trade with the EU. They have brazenly abused this imbalance for decades, erecting huge tariffs, permitting massive subsidies, and engaging in currency manipulation to gain a trade advantage,” Trump tweeted.

“Plus, they stonewall U.S. companies with unfair corporate penalties, and politicians' lawyers file endless lawsuits to block American products. Talks are going nowhere. As of June 1, all goods, products, and food coming into the U.S. from the EU will be taxed 50%. The tariff will not apply to goods, products, and food manufactured in the U.S. and sold in the E.U.,” he added.

Trump's announcement instantly sparked reactions across financial markets, including cryptocurrency.

Bitcoin Drops After Policy Warning

Immediately following Trump's announcement, Bitcoin (BTC) price slid to $107,367 on Bitstamp. However, it quickly rebounded, rising to $109,348 by 12:05 ET.

The 4-hour chart shows a brief red candle followed by a strong recovery. This move came with increased trading volume, now at 470 BTC, confirming a surge in participation.

The chart also displays the 50-period Exponential Moving Average (EMA), currently at $106,734. This EMA continues to act as a key support. Bitcoin has consistently traded above it since early May. Each correction found buyers around the EMA, reinforcing its importance.

The sharp Bitcoin drop and immediate bounce highlight how the market absorbed the tariff shock. Despite the price slipping to touch lower levels, buyers quickly pushed it back above $109K. The rejection from resistance near $112,500 remains valid, but the overall structure still favors bulls as long as Bitcoin stays above the EMA.

RSI Drops Below 50 After Sudden Bitcoin Sell-Off

The 14-period Relative Strength Index (RSI) for Bitcoin has fallen to 48.63 on the 4-hour chart. The RSI had recently touched overbought territory near 75, but the current reading confirms a shift in momentum.

At the same time, the RSI moving average—often used as a trend guide—sits at 66.83. This wide divergence between the RSI and its average signals that the bullish strength has faded quickly. The sharp breakdown reflects increased selling pressure and weaker buyer activity.

If the RSI stays below 50, it will confirm a bearish phase in the short term. Meanwhile, any reversal above 50 could indicate stabilization. Until then, the RSI points to rising uncertainty and potential for more downside in Bitcoin's mid-term trend.

Tariff Threat Extends Market Impact

Trump's demand for a 50% EU tariff rattled not only crypto. U.S. stock futures also pulled back. According to NBC News, analysts warned of a broader trade war. The threat raised fears of inflation, supply disruptions, and reduced investor confidence.

European officials have not yet responded to Trump's statement. The lack of comment adds to the uncertainty surrounding the situation.

Markets are now focused on the EU's reaction and any potential response from the U.S. government. With the tariffs set to take effect on June 1, we can expect more volatility in the market.

"Harvard got cancelled. Apple got warned. Tariffs are back. Deglobalisation flashes red. Trump is still the market’s unhedgeable tail risk," wrote Gracy Chen, managing director of Bitget, in a post on X.

Her remark neatly sums up market fears and adds weight to investor concerns over rising economic nationalism.

The coming days may bring more swings in crypto and broader markets. If additional tariffs or retaliation are announced, markets could remain unstable. Until then, BTC's key support at $106,734 remains critical for short-term direction. The recent rebound above $109K shows resilience, but price must stay above the 50 EMA to maintain bullish momentum.

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