- Bitcoin dropped 2% after China imposed a 34% tariff on U.S. goods, sparking fears of a market crisis scenario.
- Analysts warn that breaking Bitcoin’s $80K-$90K range could trigger major volatility amid escalating U.S.-China trade tensions.
Bitcoin has taken a sudden hit as China retaliated against U.S. tariffs, fueling fears of an impending market crisis. The world’s largest cryptocurrency dropped 2% within minutes of the announcement that China will impose a 34% duty on all U.S. goods—a direct response to former President Donald Trump’s aggressive tariff policies.
Market analysts are now warning of a potential “crisis scenario” for BTC and broader financial markets, as escalating trade tensions could trigger increased volatility and risk-off sentiment among investors.
China’s Move Sparks Market Uncertainty
China’s decision to retaliate with such a hefty tariff increase has sparked immediate concern across global markets. Investors had been optimistic that the Federal Reserve might step in with monetary easing to stabilize economic conditions, but the sudden escalation in the U.S.-China trade war has added new layers of uncertainty.
Sergei Gorev, head of risk at crypto platform YouHodler, emphasized that this scenario is bearish for both U.S. stocks and Bitcoin, predicting that if Bitcoin breaks below its previous March lows, it could open the door to further declines in 2025.
Bitcoin’s Key Levels to Watch
Bitcoin had briefly dipped below $80,000 per BTC in March before rebounding on speculation that Trump might soften his stance on trade tariffs. However, the recent price action suggests that Bitcoin is now stuck in a tight trading range between $80,000 and $90,000, with analysts warning that breaking out of this range could trigger a major price movement.
Javier Rodriguez-Alarcon, chief commercial officer at XBTO, noted that unless a new macroeconomic catalyst emerges, Bitcoin’s near-term trajectory will likely depend on global risk sentiment and the impact of the new tariff policies.
What’s Next for Bitcoin?
With uncertainty looming, traders and investors are closely monitoring how these new tariffs will be enforced in the coming weeks. Many experts recommend limiting leverage exposure and focusing on capital preservation until the market digests the full impact of China’s retaliatory measures.
As tensions between the U.S. and China continue to escalate, Bitcoin’s role as a hedge against economic instability will once again be put to the test. Whether Bitcoin can maintain its bullish momentum or succumb to bearish pressure will depend on how the market reacts to the evolving geopolitical landscape.
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