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Bitcoin faces potential correction below $90K amid trade war fears

Bitcoin faces potential correction below $90K amid trade war fears

GrafaGrafa2025/02/05 05:40
By:Isaac Francis

Bitcoin (CRYPTO:BTC) is at risk of a significant correction below the $90,000 mark due to escalating concerns surrounding a potential global trade war.

This follows the announcement of new import tariffs by both the U.S. and China, which has added volatility to the cryptocurrency market.

On February 4, Bitcoin briefly fell below $100,000 as fears intensified following U.S. President Trump's executive order imposing tariffs on goods from China, Canada, and Mexico.

In response, China's Ministry of Finance announced its own tariffs of up to 15% on select U.S. imports, effective February 10.

Ryan Lee, chief analyst at Bitget Research, noted that these tariff decisions could introduce further volatility to risk assets like Bitcoin.

“Escalating tensions may weaken traditional markets, prompting investors to seek Bitcoin as a hedge against inflation and currency devaluation,” he stated.

However, Lee also cautioned that broader market sell-offs driven by economic uncertainty could lead to short-term corrections for Bitcoin.

James Wo, founder and CEO of DFG, echoed these sentiments, indicating that historical patterns show large economies imposing tariffs often result in significant market drawdowns.

He warned of a potential short-term risk for Bitcoin falling below $90,000 amidst these economic pressures.

Despite these challenges, Bitcoin must remain above $97,000 to avoid triggering over $1.3 billion in leveraged long liquidations across exchanges.

Market participants are closely watching upcoming discussions between Trump and Chinese President Xi Jinping regarding trade tensions.

At the time of reporting, the Bitcoin (BTC) price was $98,190.54.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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