Bitcoin Price Drops 12%: Will Trump’s Tax Relief Rumors Spark a BTC Rally?
Highlights
- Bitcoin Price Crash: Bitcoin price crashed 12% amid investors' disappointment and Trump's 25% tariff on Canada.
- Rumors of Tax Relief: Rumors suggest Trump may announce zero capital gains tax on US-based cryptocurrencies, potentially catalyzing a massive rally.
- Recovery Rally Possible: Bitcoin price could reclaim $100K if the tax relief rumors are true, and the upcoming Crypto Summit may bring more clarity.
The Bitcoin price has been on a roller coaster ride over the past four days, plunging 12% amid market volatility. The cryptocurrency market, which surged to a $3.26 trillion valuation on March 3, has since lost 11.8% and dropped to 2.85 trillion. Rumors of a potential Trump tax relief announcement at the upcoming March 7 Crypto Summit have sparked speculation: Could this news catalyze a Bitcoin rally and help BTC reclaim its recent highs? Let’s dive into the latest developments and analyze what’s next for the BTC price.
Will Bitcoin Price Rally as Rumors Suggest Trump Mulls on Zero Tax for US-based Cryptocurrencies?
Rumors on Twitter suggest that Eric Trump and David Bailey accidentally revealed this “no capital gains tax” on American-based cryptocurrencies. If this rumor has some truth to it, it could catalyze another rally similar to the one witnessed two days ago. Bitcoin price could even reclaim $100K in such a case.
Nick O’Neil, a popular crypto influencer, posted a video to X, “Trump moves to abolish capital gains.” He added,
“Rumors are circulating that Trump will announce zero capital gains tax on US-based cryptocurrencies on March 7 Crypto Summit.”
The influencer further questioned how Trump would achieve this as it would require the US House of Representatives to approve this move. O’Neil added that Trump couldn’t achieve this just from an executive order from the president.
The rumor’s credibility will be tested in the coming days as the Crypto Summit is just three days away. If true, it could catalyze a massive rally in US-based cryptocurrencies such as Cardano (ADA), Solana (SOL), Ripple’s XRP and so on.
Bitcoin Price Forecast: What’s Next For BTC?
The daily chart shows Bitcoin price rally that pushed into $94K faced rejection around the previously formed value area, extending from $93.3K to $101.3K. Now, BTC trades between two key levels at $85.3K and $78.6K, the previous quarter VWAP and the midpoint of the six-month candlestick, respectively.
A breakdown of the $78.6K level could catalyze and correct to $73.4K, which is the previous year’s midpoint. However, BTC price is unlikely to stop here and look for a retest of the stable support level at $70.1K, which is the upper limit of the previous value area that extends up to $60.4K.
Why Did Bitcoin Crash?
Although investors expected a Bitcoin-only strategic reserve establishment, US President Donald Trump added a few altcoins like Ripple (XRP), Solana (SOL) and even Cardano (ADA). This announcement came on the weekend, during a low liquidity day, which catalyzed a 20.46% rally in Bitcoin price that pushed it from a low of $78.2K to $94.2K.
As investors realized that this announcement, while bullish, needed majority votes from Democrats and Republicans to be ratified, it dampened their optimistic outlook. Trump’s 25% tariff on Canada on Monday was the final nail in the coffin that catalyzed a 12.66% plummet in Bitcoin’s value.
Bitcoin price today trades at $93,753 after dropping 2.75% on Tuesday.
The Bitcoin price remains highly volatile, with recent developments like Trump’s Crypto Strategic Reserve and tariff announcements causing significant market swings. As the March 7 Crypto Summit approaches, all eyes are on whether the Trump tax relief rumors will come to fruition. If true, this could spark a major Bitcoin rally, potentially pushing the BTC price to new highs. However, investors should remain cautious, as the market’s reaction will depend on the credibility of these rumors and broader macroeconomic factors. Stay tuned for the latest updates on the Bitcoin price and its future trajectory.
Frequently Asked Questions (FAQs)
1. What is the current Bitcoin price after the recent market crash?
2. What triggered the Bitcoin price crash?
3. Is a recovery rally possible for Bitcoin?
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