Bitcoin Drops Below $100K Amid US-China Trade Tensions

Bitcoin Dips Below $100K Amid Market Turmoil, but Signs of a Rebound Emerge

Bitcoin (BTC) has dipped below $100,000 amid market turmoil, but signs of a rebound are emerging. The largest cryptocurrency by market capitalization fell as much as 3.6% to $98,199 on Tuesday, as trade tensions between the world’s two largest economies intensified. China retaliated to Washington imposing a 10% levy on all Chinese goods by announcing fresh tariffs on certain products imported from the US, including oil and liquefied natural gas. The renewed market turbulence erased gains from Monday’s relief rally, which came after a temporary agreement by the Trump administration to delay tariffs on Mexico and Canada by a month. Cryptocurrencies had fallen sharply when the levies were first announced over the weekend.

US investors pulled a net $235 million from a group of 12 Bitcoin-focused exchange-traded funds on Monday, indicating a more cautious approach among institutional players. Open interest in Bitcoin futures contracts on CME Group Inc.’s derivatives exchange also fell 4%, signaling a more cautious approach among institutional players. President Donald Trump, who is avowedly pro-crypto, has also introduced fresh uncertainty for digital-asset markets. While cryptocurrencies initially surged following Trump’s election, they are now struggling amid a challenging year marked by geopolitical and regulatory headwinds.

Bitcoin was trading at $98,517 as of 8:10 a.m. on Tuesday in London, about 10% away from its record high. The funding rate, a recurring fee collected from traders to maintain the price of a perpetual contract and the underlying asset’s spot price, has been a key indicator of Bitcoin’s price action. A positive funding rate suggests a bullish sentiment, and negative funding indicates a bearish sentiment. If funding is positive, long positions pay short positions and vice versa. The chart shows that the last few times the 24-hour funding rate flipped negative, BTC catalyzed a quick reversal. If history rhymes, the recent crash could also be undone, and the initial spike would be just a hint of what’s next.

Despite the recent crash and more than $8 billion in liquidations across crypto markets, the bullish Bitcoin price trend remains intact. Although BTC