Bitcoin Stagnates as US Maintains 55% China Tariffs

Bitcoin and other cryptocurrency markets have experienced a period of stagnation despite the release of positive inflation data. This stagnation is attributed to the United States' decision to maintain tariffs on China, which has caused traders to reassess the implications of the US-China trade deal. The tariffs, which now stand at 55%, are significantly higher than the previous rate of 30%. This increase has raised concerns about its potential impact on the US economy and, consequently, on the price of Bitcoin.

According to Keith Alan, co-founder of trading resource Material Indicators, the 55% tariff rate is a clear potential driver of short-term Bitcoin price action. Despite the relatively positive economic report and the news of a potential trade deal with China, traditional financial markets and cryptocurrency markets experienced a slight downturn. Alan speculates that the increase in tariffs from 30% to 55% is a significant factor in this downturn, as it will have widespread economic implications.

Alan's analysis suggests that the overall picture remains conducive to the Bitcoin bull case. He notes that there is a heavy concentration of Bitcoin ask liquidity stacked from $111,000 up to $120,000, with disproportionately less bid liquidity below it. This indicates that there is significant resistance at these price levels, but also that there is potential for further price increases if these levels are surpassed.

Alan does not expect the market to experience a sudden drop in price, leaving sellers in control. He believes that support tests are healthy and that the 2025 Yearly Open is a crucial line in the sand for Bitcoin bulls. This support level, along with the $100,000 mark, is seen as important in the long term, even during the next bear market. Alan believes that consolidation above $100,000 with no wicks below it will validate the resistance/support flip and build structural support for the next bear market.

In summary, Bitcoin must avoid wicks below $100,000 as traders digest the 55% China tariffs. The 2025 Yearly Open is also a key support level going forward. Despite the potential short-term impact of the tariffs, the overall picture remains conducive to the Bitcoin bull case, with significant resistance at price levels up to $120,000.