Bitcoin’s recent price changes have aroused investor concerns, with the cryptocurrency potentially plunging below $90,000. The increased concern stems from the heightened trade tensions between the United States and China, sparked by both countries’ announcements of higher import duties.
On February 1, the US government levied taxes on a variety of commodities imported from China, Canada, and Mexico. In response, China’s Ministry of Finance imposed retaliatory duties of up to 15% on specified US goods, which will take effect on February 10. These economic policies have exacerbated fears of a long-term trade war, resulting in greater market volatility.
Following these developments, Bitcoin temporarily dropped below $100,000, reaching a low of $96,200 before recovering. However, analysts warn that further economic volatility could drive the price below $90,000 in the short term. Market experts point out that, while Bitcoin is frequently viewed as a hedge against inflation and currency depreciation, larger sell-offs in financial markets may also result in temporary falls.
The imposition of new tariffs has historically resulted in substantial market downturns for equities, commodities, and cryptocurrencies. Some economists believe that continued trade tensions may damage traditional financial markets, increasing demand for alternative assets such as Bitcoin. Others think that the uncertainty may cause a wave of profit-taking, resulting in short-term losses.
Analysts believe that Bitcoin must remain over $97,000 in order to continue on its present trend. A loss below this level could trigger additional selling pressure, leading to more drops. As international tensions rise, investors are intently monitoring market reactions to determine the long-term impact for Bitcoin and other digital assets.
