Bitcoin News Today: Bitcoin's $125k Rally Stalls Amid Trade Tensions, Fed Uncertainty, and Leverage Risks

Bitcoin's recent retreat from record highs to below $115,000 has sparked renewed debate over the timeline for a potential $125,000 rally. Analysts point to three key factors delaying bullish momentum: escalating U.S.-China trade tensions, shifting Federal Reserve policy expectations, and the fragility of leveraged crypto positions.

President Donald Trump's threat to impose a 100% tariff on Chinese imports-bringing total tariffs to 130%-triggered the largest cryptocurrency liquidation in history, per CoinGlass data. The move, coupled with export controls on rare earth minerals, caused Bitcoin to plummet nearly 10% in five days, while ether and solana fell 14% and 20%, respectively Trump’s new 100% tariffs on China triggered a $19 billion ... - CNN^[1]. The selloff mirrored broader market jitters, with the S&P 500 and Nasdaq posting six-month declines. "This is a risk-off environment as investors flee leveraged assets," said FalconX's Ravi Doshi, noting over $18 billion in crypto liquidations since late Friday $6 billion wiped out in 1 hour! Trump to impose 130^[2].

Weaker U.S. labor market data has further muddied the outlook. The August JOLTS report showed job openings fell to 7.18 million-the lowest since 2021-while the ADP private-sector jobs figure underperformed expectations Bitcoin squeezes shorts in $108K spike as US jobs …^[4]. Though softer hiring could ease inflation and support rate cuts, traders remain cautious. The Federal Reserve's September rate-cut probability now stands at 65%, down from 80% before the jobs data Derivatives Funding Rates Collapse to 2022 Lows as Billions …^[6]. "A delayed Fed pivot keeps liquidity tight, capping Bitcoin's upside," said Bitwise's Andre Dragosch US Jobs Data and BTC USD Rally Put Fed Rate Cuts …^[5].

Derivatives markets underscore the fragility of the crypto rally. Funding rates for Bitcoin futures collapsed to 2022 bear-market levels after the October selloff, per Glassnode. Altcoins fared worse, with median funding rates hitting -0.4% as $10 billion in open interest vanished . The turmoil was exacerbated by a large whale's $1.1 billion short position, which reaped $200 million in profits post-tariff announcement. "The market is deleveraging aggressively," said analyst Rafael, warning that Bitcoin's $116,100 resistance level will be a critical test .

While spot Bitcoin ETFs continue to attract inflows-BlackRock's IBIT saw $2.63 billion in weekly net inflows-the regulatory logjam caused by the U.S. government shutdown adds another layer of uncertainty . For now, Bitcoin's path to $125,000 hinges on resolving trade tensions, clearer Fed signals, and a stabilization of leveraged positions.