Bitcoin Drops Below $100K Amid U.S.-China Trade Tensions

Bitcoin's price dipped below $99,000 on February 4, with a 24-hour gain of 1.9%, as escalating U.S.-China trade tensions threatened its short-term stability. The digital asset briefly fell below $100,000 earlier in the day, sparking fears of a full-blown trade war, according to market experts.

Analysts warn of potential correction risks for Bitcoin if the broader economic landscape deteriorates. Ryan Lee, chief analyst at Bitget Research, noted that heightened volatility in traditional markets could either push investors to Bitcoin as a hedge or cause a sell-off in risk assets. "Escalating tensions may weaken traditional markets, prompting investors to seek Bitcoin... but broader uncertainty could still trigger short-term corrections," Lee said.

Despite the pressure, Bitcoin remains on track with historical cycles. The cryptocurrency is up 525% since the FTX collapse and continues to move within a channel between $90,000 and $109,000. CoinDesk analyst James Van Straten pointed out that Bitcoin's trajectory still aligns with its 2017 cycle.

Bitcoin's price slipped to $98,000 on February 4, as China retaliated against U.S. tariffs with its own import duties and an anti-trust investigation into Google. The crypto market reacted sharply to geopolitical developments, with analysts warning of sustained volatility if tensions persist.

In the face of trade war fears, Bitcoin's price analysis suggests renewed pressure due to trade tensions between the U.S. and China. The U.S. imposed a 10% tariff on all Chinese goods, with China retaliating and putting tariffs on products imported from the U.S., including oil. The country also opened an investigation against U.S. tech giant Google for alleged antitrust violations, raising the prospects of a full-blown trade war between the two largest economies.

As a result, markets are facing increased volatility and bearish sentiment, as highlighted by Bitcoin's price action. Bitcoin is back in the red during the current session, wiping out gains from yesterday's relief rally, and slipping below $100,000. However, some analysts have suggested that a prolonged trade war could be beneficial to Bitcoin and other cryptocurrencies, as it may drive investors to seek safe havens