Bitcoin News Today: Trade War Fears Drive Crypto Exodus: Bitcoin Plummets Below $120K

Bitcoin prices dipped below $120,000 on October 9, 2025, as U.S. President Donald Trump's escalating trade tensions with China triggered a sharp sell-off in the cryptocurrency market. The move followed Trump's announcement of a 100% tariff on Chinese imports, escalating the trade dispute to its highest level since 2019 Forbes^[1]. The total crypto market capitalization plummeted by nearly $200 billion within hours, with Bitcoin falling 10% to $107,000 and Ethereum, XRP, and BNB declining over 15% The Coin Republic^[4]. The selloff mirrored broader market turmoil, with the S&P 500 and Nasdaq dropping 1.6% and 1.3%, respectively Cryptona^[6].

The price decline was attributed to a combination of factors. Analysts highlighted short-term profit-taking by traders after Bitcoin reached an all-time high of $126,000 earlier in October Forbes^[1]. Additionally, the U.S. dollar's strength against other fiat currencies weighed on crypto as a hedge asset. Joe DiPasquale, CEO of BitBull Capital, noted that the pullback reflected "risk-off sentiment across broader markets and renewed dollar strength" Forbes^[1]. The impact of Trump's tariff rhetoric was compounded by the upcoming earnings season, which heightened uncertainty among traders Forbes^[1].

The trade war's economic ripple effects extended beyond crypto. The U.S. and China's escalating tensions disrupted global supply chains, particularly in semiconductors and blockchain infrastructure, deepening market uncertainty The Coin Republic^[4]. The 10-year U.S. Treasury yield dipped to 4.071% following Trump's statement, while the U.S. Dollar Index (DXY) fell 0.63% to 98.91 . Meanwhile, gold surged over 1% as investors shifted to traditional safe-haven assets Cryptona^[6].

Technical indicators also signaled bearish pressure. Bitcoin's 4-hour Relative Strength Index (RSI) fell to 48, and the MACD lines approached neutral territory, suggesting a potential slowdown in its rally Coindesk^[3]. Over $1.65 billion in leveraged crypto positions were liquidated in a 24-hour period, with Ethereum accounting for $309 million of the forced closures . The DeFi sector and altcoins bore the brunt of the selloff, with Solana and Dogecoin dropping over 20% weekly .

Despite the volatility, some analysts remained cautiously optimistic. Dr. Sean Dawson of Derive.xyz noted that traders were positioning for a potential $150,000+ move in Bitcoin before the end of October, citing large call options expiries and high implied volatility Coindesk^[3]. However, the path to recovery depends on Bitcoin holding key support levels. If the $120,000 threshold fails, further declines toward $116,000 could follow Coindesk^[3].

The geopolitical fallout continued to dominate market sentiment. Trump's decision to cancel a planned meeting with Chinese President Xi Jinping and his rhetoric on rare earth metals export controls intensified fears of a prolonged trade war The Coin Republic^[4]. The U.S. government's 90-day tariff pause, announced on April 9, 2025, had briefly stabilized markets but failed to address long-term uncertainties CoinPedia^[5].

Looking ahead, the crypto market faces critical catalysts, including the U.S. consumer price index (CPI) report on October 15, the SEC's decision on a Solana ETF on October 16, and the Federal Reserve's monetary policy meeting on October 30 . Institutional investors, meanwhile, remained split, with Bitcoin ETFs recording mixed inflows and outflows as traders rotated capital between assets .