Bitcoin Price Drops Amid US-China Tensions—What’s Next?

Bitcoin Daily Chart

Due to the impact of heightened US-China trade tensions, the market has become unstable, and Bitcoin failed to sustain the critical $100,000 level, dropping to around $97,600 today. The United States imposed additional tariffs on China, leading to retaliatory measures from China, further escalating tensions. Amid this situation, investors have turned to safe-haven assets, driving up gold prices, while risk assets like Bitcoin have faced selling pressure. However, the potential easing of cryptocurrency regulations in the US could serve as a positive factor in the medium to long term, drawing attention to future market trends.

Future Outlook and Predictions

The ongoing US-China trade conflict continues to create uncertainty, putting downward pressure on Bitcoin prices as investors adopt a risk-averse stance. In the short term, Bitcoin’s movement can be expected as follows:

1. If US-China tensions escalate: Uncertainty will deepen, prompting investors to shift towards safe-haven assets, which may lead to further declines in Bitcoin’s price.
2. If tensions ease: Risk sentiment in the market may improve, allowing Bitcoin to regain upward momentum and potentially retest the $100,000 level.

On the other hand, the reported easing of cryptocurrency regulations in the US could positively impact Bitcoin in the medium to long term. Regulatory relaxation may attract institutional investors and new participants, driving up demand and providing support for price growth.

From the chart, Bitcoin is currently trading near its moving average and approaching critical support levels. If these levels hold, a short-term rebound is possible, while a break below may signal further declines. The overall trend will largely depend on the resolution of macroeconomic uncertainties, particularly the direction of the US-China trade relations and regulatory developments in the cryptocurrency market.

Explanation for Beginners

For those inspired by this article and chart to start investing, here’s some practical advice. Based on the current situation, there seems to be an opportunity to capitalize on a potential recovery from the recent price dip. Since the price is hovering near the moving average, now could be a good time to start buying small amounts.

In the medium to long term, the US easing its cryptocurrency regulations could positively impact the market. Therefore, consider starting with a gradual, dollar-cost averaging approach to your investments. After buying, keep an eye on the market, especially as Bitcoin has the potential to surpass the $100,000 mark again.