The ongoing trade war between the US and China has taken a new turn, with Beijing retaliating against Washington’s 10% tariff on Chinese goods by imposing its own counter-tariffs on US imports. This escalation in tensions between the two largest economies in the world has had a ripple effect on various markets, including the cryptocurrency market.
Bitcoin, the leading cryptocurrency, has already seen a decline of 2.66% in value today. With geopolitical uncertainty on the rise, the next moves of Bitcoin are crucial and could set the tone for the days ahead.
Let’s delve deeper into the situation.
The Story Behind Trump’s Tariffs
The trade war saga began on February 1 when President Trump announced plans to impose tariffs on Canada, Mexico, and China. This announcement led to a 4.64% drop in the price of Bitcoin, which was trading at $102,398.67 at the start of the day.
However, rumors of Trump potentially pausing tariffs on Canada and Mexico sparked optimism in the market, prompting Bitcoin buyers to re-enter the market. As a result, Bitcoin surged by 3.75% on February 3, reclaiming its position above $100K. Additionally, Trump’s approval of an executive order to establish a US sovereign wealth fund further boosted investor confidence.
Just as Bitcoin was recovering from the initial shock of tariffs, China’s counter-tariffs have reignited market fears. This uncertainty has led to a fresh wave of selling, causing Bitcoin to drop by 2.66% today alone.
Crypto Experts Predict More Volatility
Top analysts in the cryptocurrency space anticipate continued price swings for Bitcoin in the near future:
– Michael Van de Poppe, a renowned crypto analyst, foresees ongoing market volatility.
– Phoenix, an experienced trader, believes Bitcoin is entering a new short-term trading range due to the prevailing uncertainty.
– Axel Adler Jr., an On-chain analyst, highlighted that Bitcoin’s funding rates have turned negative, a signal often associated with future price increases.
A New Crypto Strategy is Coming?
In the midst of market uncertainty, David Sacks, Trump’s AI and cryptocurrency advisor, is scheduled to hold a press conference today to unveil the government’s cryptocurrency 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, and House Agriculture Committee Chairman G.T. Thompson.
This event is expected to shed light on how the administration intends to position the US as a global leader in cryptocurrency innovation.
As the trade war between the US and China continues to unfold, the cryptocurrency market remains on edge, awaiting further developments that could shape the future landscape of digital assets.