Bitcoin (BTC) price dropped below $118k on Friday following the fear induced by the escalating tariff trade war between the United States and China. The flagship coin dropped nearly 3% to trade at about $117,672 at press time.
As Coinpedia reported, the crypto market recorded heavy liquidation of nearly $1 billion after President Donald Trump threatened to slap China with fresh massive tariffs.
According to Adam Kobeissi, founder of The Kobeissi Letter, it is safe to assume a TACO trade will be fruitful in the near future. A TACO trade, meaning ‘Trump Always Chickens Out’, was confirmed earlier this year after President Trump threatened big tariffs, markets dumped significantly, negotiations happened, and markets rebounded.
“President Trump’s post about China claiming “massive” tariff increases are coming is a bargaining chip. We believe trade talks between the US and China will resume after a little turbulence,” Kobeissi noted.
The crypto market is expecting the Fed to continue with its rate cuts before the end of this year to stimulate economic growth. Furthermore, the U.S. dollar has been losing value year-to-date, down over 10%, amid struggling labor markets and high inflation.
As such, Kobeissi highlighted that asset owners will continue to win in the long term. Already, the Gold price has been in a parabolic rally since mid-August this year, potentially hinting at an imminent rally for Bitcoin.
According to market analyst Benjamin Cowen capital rotation to Bitcoin from the altcoin market was accelerated by Friday’s high-impact news. Meanwhile, Cowen highlighted that the wider crypto market will likely experience a parabolic rally before the end of this year.
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