Bitcoin Braces for $90K Correction as Trade War Fears Mount

Bitcoin Faces Short-Term Correction Risks Below $90,000 Amid Trade War Concerns, Analysts Warn

Bitcoin's price has been volatile in recent days, with fears of a potential global trade war escalating following import tariffs announced by US President Donald Trump and China's Ministry of Finance. The Ministry of Finance of the People's Republic of China announced new import tariffs of up to 15% on some US imports effective Feb. 10, according to official documents published on Feb. 4. China's decision came in response to Trump's Feb. 1 executive order imposing import tariffs on goods from China, Canada, and Mexico.

After a brief recovery, Bitcoin's (BTC) price fell below the $100,000 mark on Feb. 4, pressured by growing fears of a potential trade war ignited by Trump's tariffs. Despite finding its daily bottom and reversing from $96,200, Bitcoin's price risks a correction below $90,000 on growing global trade and inflationary concerns.

Ryan Lee, chief analyst at Bitget Research, said China's tariff decision could introduce additional volatility to risk assets such as Bitcoin. "Escalating tensions may weaken traditional markets, prompting investors to seek Bitcoin as a hedge against inflation and currency devaluation. However, a broader market sell-off driven by economic uncertainty could also trigger short-term corrections, potentially pushing Bitcoin below $90,000," Lee told Cointelegraph.

Historically, large economies introducing import tariffs have caused "significant market drawdowns" according to James Wo, the founder and CEO of venture capital firm DFG: "This might see a potential short-term risk of a wider correction sub $90,000 for Bitcoin and in the broader market including equities and commodities."

Meanwhile, Bitcoin needs to remain above $97,000 to avoid more downside volatility. A potential correction below $97,000 would trigger over $1.3 billion worth of cumulative leveraged long liquidations across all exchanges, CoinGlass data shows.

Bitcoin and risk assets may face downward pressure if the tariffs strengthen the US dollar and attract more capital inflows, Lee said. "The key factor will be monetary policy — if the Fed responds with lower