Bitcoin (BTC) enjoyed a brief sigh of relief yesterday as the US delayed its proposed 25% trade tariffs on Mexico and Canada by a month. However, the US proceeded with its 10% tariffs on China, prompting retaliatory measures from Beijing. The escalation has pushed BTC back below the critical $100,000 price level.
Bitcoin Suffers Amid Trade Wars
After a volatile 24 hours filled with uncertainty surrounding US trade tariffs on Mexico and Canada, BTC experienced a short-lived relief rally to $102,000. This came after US President Donald Trump announced a 30-day delay in imposing tariffs on the two North American nations.
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However, today’s implementation of US tariffs on China triggered a sharp downturn, causing BTC to break below the $100,000 level. In response, China’s Ministry of Finance announced new countermeasures.
Starting February 10, China will impose an additional 15% tariff on coal and liquefied natural gas, along with a 10% tariff on agricultural equipment, crude oil, and certain vehicles.
Additionally, Beijing has accused the US of violating World Trade Organization (WTO) regulations with its one-sided tariff policies. The Chinese Ministry of Commerce also stated that it would tighten export controls on key raw materials, including molybdenum, indium, bismuth, tellurium, and tungsten, citing national security concerns.
With trade tensions escalating between the US and China, analysts predict heightened volatility in the crypto market in the coming days. Well-known crypto strategist Michael van de Poppe shared his outlook:
Bitcoin bounced back swiftly and is currently acting within the range. I assume we’ll see new ATHs in February and it’s quite normal to correct after such a strong bounce. Volatility through the roof, but, as long as Bitcoin remains above $93K, a new ATH is likely.
Meanwhile, crypto trader and investor Phoenix suggested that BTC could establish a new trading range amid the ongoing trade war. However, history suggests that heightened tariffs could spell trouble for cryptocurrencies.
Web3 enthusiast merts.eth pointed out in an X post that BTC plummeted 65% in 2018 when Trump first initiated a trade war with China. The effects were not limited to digital assets, as the S&P 500 also dropped 12% in the weeks following the implementation of tariffs.
More Downside For BTC?
As Bitcoin struggles to hold the $100,000 price level, concerns are mounting about another potential breakdown in price. Crypto analyst Ali Martinez recently pointed out that if BTC fails to hold the $97,190 support level, there could be more pain for the top digital asset.
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The analyst made another observation about how BTC is currently trading in a bearish flag pattern. At press time, BTC trades at $99,961, up 1% in the past 24 hours.
Featured image from Unsplash, charts from X and TradingView.com
