Bitcoin Battles Tariff Storm, Struggles to Reclaim $100K

Bitcoin (BTC) continues to grapple with headwinds stemming from escalating global trade tensions, particularly the ongoing tariff war led by U.S. President Donald Trump. As the U.S. stock market remains vulnerable to the impact of these tariffs, Bitcoin's price has been struggling to reclaim the $100,000 milestone.

Trump's trade war, initially focused on Canada, Mexico, and China, is now expanding to include Europe. The President has threatened to impose new tariffs on European goods as early as Tuesday or Wednesday. While these tariffs may serve as a negotiating tactic, they are likely to have negative consequences for U.S. businesses and consumers. According to TD Economics, quoted in a BBC article, car prices in the U.S. could rise by as much as an extra $3,000 due to these tariffs.

Historically, tariffs have not benefited the countries they are imposed on, nor the countries imposing them. Therefore, it is reasonable to expect that these tariff wars could serve as short to medium-term headwinds for the economies involved. However, if no agreements are reached and the tariffs persist in the long term, they could have a significant depressive effect on major world economies, leading to a real drag on their growth.

In this macroeconomic environment, Bitcoin is attempting to maintain its current bull market. Since reaching an all-time high of $109,000 on 20 January, the BTC price has been in a downtrend. A sharp decline to a local bottom of $91,000 has occurred, and it remains to be seen whether this downtrend can be broken.

To reverse the downtrend, Bitcoin bulls must achieve a higher high, ideally above $100,200. Failure to do so could result in another dip to the descending trendline of the wedge's bottom or even the local low at $91,300. Currently, BTC is battling resistance at $97,000, with further resistances up to $99,000. Breaking out of the descending wedge will be the top priority for bulls.

The daily chart for BTC shows a $14,000 range, measuring from $92,000 to $106,000.