
US-China trade tensions have escalated, with China retaliating against US tariffs, negatively impacting the Bitcoin market.
Bitcoin initially saw positive price movement due to rumors of the US halting tariffs on Canada and Mexico, but this was short-lived.
Experts predict continued Bitcoin volatility and a new trading range, despite some bullish signals like negative funding rates.
The US-China trade war just took a dramatic turn. Beijing has fired back at Washingtonโs 10% tariff on Chinese goods with its own counter-tariffs on US imports, escalating tensions between the worldโs two biggest economies. While Bitcoin initially benefited when President Donald Trump delayed tariffs on Canada and Mexico, Chinaโs latest move has rattled the crypto market.
Bitcoin has already dropped 2.66% today. With geopolitical uncertainty at an all-time high, Bitcoinโs next move could set the tone for the days ahead.
Letโs break it down.
The Story Behind Trump’s Tariffs
On February 1, Trump announced plans to impose tariffs on Canada, Mexico, and China. Bitcoin, which started the day at $102,398.67, fell 4.64% between February 1 and 2 as the market reacted.
However, when rumors spread that Trump might pause tariffs on Canada and Mexico, Bitcoin buyers jumped back in, pushing prices higher. On February 3, BTC surged 3.75%, climbing back above $100K.
Adding to the optimism, Trumpโs approval of an executive order to establish a US sovereign wealth fund encouraged more investor confidence.
Just as Bitcoin was recovering, Chinaโs counter-tariffs triggered fresh market fears. The uncertainty has led to another selloff, with Bitcoin dropping 2.66% today alone.
Crypto Experts Predict More Volatility
Top analysts expect Bitcoinโs price swings to continue in the short term:
Michael Van de Poppe, a well-known crypto analyst, predicts ongoing market volatility.
Phoenix, an experienced trader, believes Bitcoin is settling into a new short-term trading range due to uncertainty.
Axel Adler Jr., an On-chain analyst, noted that Bitcoinโs funding rates have turned negative, a signal often linked to future price increases.
A New Crypto Strategy is Coming?
As Bitcoin struggles with market uncertainty, David Sacks, Trumpโs AI and cryptocurrency advisor, is set to hold a press conference today to outline the governmentโs crypto plans.
Joining him will be key policymakers, including:
- Senate Banking Committee Chairman Tim Scott
- Senate Agriculture Committee Chairman John Boozman
- House Financial Services Committee Chairman French Hill
- House Agriculture Committee Chairman G.T. Thompson
This event is expected to highlight how the administration aims to make the US a global leader in cryptocurrency innovation.