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Bitcoin and the broader crypto market faced renewed selling pressure on Tuesday as global trade tensions intensified. After the U.S. imposed 10% tariffs, China retaliated with an anti-trust investigation into Google and new tariffs on coal, crude oil, and farm equipment. BTC initially rebounded to $100,000 when the U.S. delayed tariffs on Mexico and Canada but quickly dropped to $98,000 following China’s countermeasures.
Crypto Volatility Persists
According to QCP Capital X post, the crypto markets remain highly volatile, reacting sharply to geopolitical developments. Min Jung, a research analyst at Presto Research, said that even though Bitcoin is compared to ‘digital gold’, it is highly vulnerable and reacts quickly to geo-political problems. The crypto market’s initial sharp reaction could be an overcorrection, but prolonged tensions may sustain volatility.
This policy change and tariff war period will be tough for crypto assets which are facing both inside and outside pressure in the US. Trump’s sovereign wealth fund creation along with restricting EU markets is already pressing a controversy and traders are panicking about its long-term effect.
Michaël van de Poppe also noted that this volatility will continue which might impact the soaring crypto market making it halt.
A Ray of Hope?
In the downtrend, there is a buzz that Trump’s administration is planning to make the US Bitcoin powerhouse as they are preparing for a “big day.”
Big day today.
White House press conference taking place later today (2:30PM ET) to discuss the policy roadmap regarding digital assets and crypto.
The Trump administration plans to reposition America as the leader in digital assets.
— Jelle (@CryptoJelleNL) February 4, 2025
Trade War Fears Weigh on Bitcoin
In the meanwhile, Justin d’Anethan from Liquifi pointed out that the U.S. tariffs on Mexico and Canada were just the beginning, with China and possibly Europe becoming key battlegrounds. Nick Ruck of LVRG Research warned that escalating trade disputes could push crypto assets lower unless negotiations lead to tariff cancellations.
Potential sanctions and regulatory restrictions on tech firms could further strain market confidence, adding to downward pressure on riskier assets like Bitcoin. If tensions continue, the market may see more meltdowns and panic sell-off may begin.
