Bitcoin Price Plunges Below $118k Amid U.S.-China Trade War Fear
Bitcoin (BTC) faced a significant drop below $118k on Friday as fears of an escalating tariff trade war between the United States and China gripped the market. The flagship cryptocurrency experienced a nearly 3% decline, trading at around $117,672 at the time of writing.
The crypto market witnessed heavy liquidation of almost $1 billion following President Donald Trump’s threat to impose fresh massive tariffs on China. This move added to the uncertainty in the market, causing investors to react by selling off their assets.
How to Navigate Bitcoin Trading During the U.S.-China Trade War
Adam Kobeissi, the founder of The Kobeissi Letter, suggested that a strategy known as the TACO trade could be beneficial in the current situation. The TACO trade, which stands for ‘Trump Always Chickens Out’, has proven successful in the past. When President Trump announced significant tariffs, markets initially dropped, negotiations ensued, and markets eventually rebounded.
Kobeissi believes that Trump’s recent tariff threats are a bargaining tactic and anticipates that trade talks between the U.S. and China will resume after some turbulence. This could potentially lead to a positive outcome for the market.
Remaining Bullish Amid Macro Uncertainties
Despite the current market volatility, there is optimism surrounding the Federal Reserve’s upcoming rate cuts to stimulate economic growth. Additionally, the weakening U.S. dollar, coupled with struggling labor markets and high inflation, is creating a favorable environment for asset holders in the long term.
Kobeissi also pointed out that the recent parabolic rally in the price of Gold could be a precursor to a similar surge in Bitcoin’s value. Market analyst Benjamin Cowen noted that capital rotation from the altcoin market to Bitcoin intensified following Friday’s high-impact news. Cowen predicts that the broader crypto market could experience a parabolic rally before the year ends.
In conclusion, the current market conditions may be turbulent, but strategic trading and a long-term perspective could lead to favorable outcomes for investors. It’s essential to stay informed, monitor developments closely, and be prepared to adapt to changing circumstances in the ever-evolving cryptocurrency landscape.