Bitcoin surged to $112,000 on October 21, 2025, fueled by optimism over the Federal Reserve's exploration of payment systems for crypto firms and broader macroeconomic expectations, according to the Benzinga report. The rally, however, was short-lived as the cryptocurrency dipped below $110,000 amid escalating U.S.-China trade tensions and a wave of investor caution reflected in ETF outflows. The price swing underscored the sector's sensitivity to geopolitical dynamics and central bank policy signals.
The decline followed a 2.96% drop in Bitcoin's price to $107,982 as uncertainty ahead of a pivotal October 2025 meeting between U.S. President Donald Trump and Chinese President Xi Jinping in South Korea intensified, the Coinotag report noted. U.S.-China tensions, which had previously triggered a 3.19% daily loss in
and a 4.55% decline in , resurfaced as key risks for crypto markets. Analysts noted that the geopolitical standoff, coupled with a prolonged U.S. government shutdown, amplified macroeconomic uncertainty, prompting risk-off sentiment across asset classes.Investor exodus from U.S. spot crypto ETFs further exacerbated the downturn. Bitcoin ETFs recorded $40.47 million in outflows on October 20, led by BlackRock's IBIT with $100.65 million in withdrawals, while Ethereum ETFs saw $145.68 million in outflows, according to the CoinPedia report. The outflows contrasted with earlier inflows of $20 million into Bitcoin ETFs reported by some analysts in a CryptoNews piece, highlighting the market's volatility. The net outflows reflected a broader trend of institutional and retail investors rebalancing portfolios amid geopolitical and economic headwinds.
Jeff Mei, COO of BTSE, attributed the price swings to "macro concerns" including U.S.-China trade tensions and the Fed's policy trajectory, in the Bitcoinsistemi analysis. "As long as these tensions persist, volatility will continue," he said, emphasizing that traders were adopting a risk-averse stance ahead of critical policy announcements, including the Fed's October rate decision. Mei also warned of the market's susceptibility to unpredictable developments, such as Trump's recent 157% tariff threat on Chinese goods, which had halted Bitcoin's upward momentum earlier in the week, the analysis added.
Despite the turbulence, some analysts remain cautiously optimistic. Markets are pricing in a 99% probability of a Fed rate cut in October, which could provide short-term support for Bitcoin above $100,000, the FXEmpire outlook reported. Additionally, October's $3.78 billion in ETF inflows, despite recent outflows, have helped stabilize prices. However, Peter Brandt, a veteran commodities trader, warned that Bitcoin's 8.2X rally from prior lows might have peaked, signaling potential for a correction, as noted in the Coinotag article.
The crypto market's volatility is occurring against a backdrop of broader economic shifts. Gold, for instance, has surged past $4,000 in 2025, with JPMorgan predicting it could double to $8,000 by 2028 as investors seek safe-haven assets, the Economic Times article reported. Meanwhile, Ethereum's technical indicators suggest a potential rebound, with on-chain data showing accumulation among large holders, according to the CryptoNews piece referenced earlier. The interplay between crypto, gold, and traditional assets underscores the complex forces shaping market sentiment.
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