Bitcoin (BTC) has been hit by news of tariffs between the US and China, Mexico and Canada in recent days, while volatility has been on the rise.
At that point, Bitcoin fell to $91,000 after Canada and Mexico retaliated against US tariffs, but it rose above $100,000 after Trump halted Mexico’s tariffs and announced a sovereign wealth fund.
Meanwhile, renewed trade tensions with China have sent BTC back down to $98,000, while analysts say trade war concerns and traditional market volatility could cause BTC to drop below $90,000 in the short term.
Bitcoin Could Fall Below $90,000!
Bitget Research Chief Analyst Ryan Lee said that China’s tariff decision could lead to more volatility and declines in risky assets like Bitcoin.
At this point, Ryan Lee stated that there is a risk of BTC falling below $90,000 and said:
“Rising tensions could weaken traditional markets and prompt investors to turn to Bitcoin as a hedge against inflation and currency devaluation.
But a broader market sell-off due to economic uncertainty could also trigger a short-term correction, potentially pushing Bitcoin below $90,000.”
Ryan Lee said the key factor will be the US monetary policy, adding, “If the Fed responds with lower interest rates to offset economic stress, increased liquidity could provide momentum for Bitcoin’s price. But in the meantime, Bitcoin needs to stay above $97,000 to avoid further declines.”
Apart from Lee, James Wo, founder and CEO of venture capital firm DFG, noted that major economies such as the US and China, which have historically imposed import tariffs, have caused significant market declines.
“This could have a negative impact on Bitcoin and the broader market, including stocks and commodities,” Wo said, adding that BTC could also be affected by these declines. “It could cause BTC to experience a broader correction that could go below $90,000 in the short term.”
Wo said that while it may be bearish in the short term, a potential trade war could also accelerate the depreciation of the U.S. dollar and increase inflation, boosting global demand for alternatives to U.S. dollar-denominated assets such as Bitcoin.
*This is not investment advice.
