Bitcoin may be headed for choppy waters as escalating U.S.-China trade tensions threaten its short-term stability. The digital asset briefly dipped below $100,000 on February 4, as both nations announced retaliatory import tariffs, sparking fears of a full-blown trade war, according to Cointelegraph.
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Analysts Warn of Correction Risks
Market experts see potential for Bitcoin to correct below $90,000 if the broader economic landscape deteriorates. Ryan Lee, chief analyst at Bitget Research, noted that heightened volatility in traditional markets could either push investors to Bitcoin as a hedge or cause a sell-off in risk assets. “Escalating tensions may weaken traditional markets, prompting investors to seek Bitcoin… but broader uncertainty could still trigger short-term corrections,” Lee said.
Historical Trends Offer a Silver Lining
Despite the pressure, Bitcoin remains on track with historical cycles. The cryptocurrency is up 525% since the FTX collapse and continues to move within a channel between $90,000 and $109,000. CoinDesk analyst James Van Straten pointed out that Bitcoin’s trajectory still aligns with its 2017 cycle.
At the time of writing, Bitcoin is sitting at $99,384.23.
