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Canada, Mexico and China promised “retaliatory measures” for Trump’s tariffs, which “heightened investor anxiety,” leading to the crypto market downturn, analysts told Cointelegraph
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Bitcoin’s price found its local bottom just above the $91,000 mark, highlighting its increasing sensitivity to macroeconomic developments.
Bitcoin’s (BTC) price fell to an over three-week low on Jan. 3 of $91,530 at 02:00 am UTC, which marked the local bottom, before recovering to $95,306 as of 8:14 am in UTC, Cointelegraph Markets Pro data shows.
BTC/USD, 1-day chart. Source: Cointelegraph
Bitcoin’s correction came two days after President Donald Trump signed an executive order to impose import tariffs on goods from China, Canada and Mexico, according to a Feb. 1 statement from the White House.
The downturn was driven by escalating investor concerns over a potential global trade war following Trump’s tariffs, according to Ryan Lee, chief analyst at Bitget Research.
The analyst told Cointelegraph:
“While Bitcoin has historically been viewed as a hedge against traditional market volatility, its recent performance highlights growing sensitivity to global economic events. The current reaction underscores how geopolitical tensions and policy decisions are increasingly shaping cryptocurrency market dynamics.”
Canada, Mexico and China have promised “retaliatory measures” for Trump’s tariffs, which “further heightened investor anxiety, prompting a shift away from riskier assets, including cryptocurrencies,” the analyst said.
Bitcoin’s movement remains in line with previous analysts’ predictions of a “local top” above $110,000 in January, before a deeper retracement.
GMI Total Liquidity Index, Bitcoin (RHS). Source: Raoul Pal
Based on its correlation with the global liquidity index, Bitcoin’s right-hand side (RHS), which marks the lowest bid price someone is willing to sell the currency for, before an “interim peak in liquidity,” may lead to a correction below $70,000 in February, Raoul Pal, founder and CEO of Global Macro Investor, said in a Nov. 29 X post.
Related: Nvidia slump and $100B crypto IPOs could fuel Bitcoin rally
Bitcoin remains sensitive to macroeconomic developments
Despite Bitcoin’s narrative as a hedge against volatility in traditional finance markets, it remains sensitive to economic developments.
Still, Bitcoin may still see a rebound compared with traditional markets, according to Alvin Kan, chief operating officer at Bitget Wallet.
Kan told Cointelegraph:
“While the sell-off reflects a typical risk-off reaction to macroeconomic shocks, Bitcoin’s safe-haven reputation still leaves room for a rebound if digital assets increasingly serve as hedges against inflation and currency devaluation.”
Related: Czech National Bank governor to propose $7B Bitcoin reserve plan
Despite short-term correction concerns related to the $36 trillion US debt ceiling, industry watchers remain optimistic about Bitcoin’s prospects for the rest of the year.
Analyst predictions for the rest of the 2025 market cycle range from $160,000 to above $180,000.
How Much Higher Will Bitcoin Go? | Mark Yusko’s 2025 Predictions. Source: YouTube
Magazine: BTC above $150K is ‘speculative fever,’ SAB 121 canceled, and more: Hodlers Digest, Jan. 19 – 25
This article first appeared at Cointelegraph.com News
