Bitcoin's Volatility Surges Amid US-China Trade War; Experts Predict New Trading Range
1min read Bitcoin's recent price volatility and geopolitical tensions have sparked concerns about the cryptocurrency's future. As the US-China trade war escalates, Bitcoin has experienced significant price fluctuations, with the market reacting to tariff announcements and retaliations. In February 2024, Bitcoin's price dropped by over 2.66% following China's imposition of counter-tariffs on US goods. Experts predict ongoing volatility and the formation of a new trading range in the Bitcoin market.
Meanwhile, the global economy faces uncertainty, with the Federal Reserve struggling to protect the US dollar as BRICS nations explore a post-dollar world. The business cycle theory suggests that market crashes are a natural part of economic activity, and a severe crash could be on the horizon. Despite the stock market's recent resilience, with all-time highs and a lack of deep, prolonged corrections, the "mother of all bubbles" could pop at any moment. The US government's increasing debt and potential shifts in interest rate policies could exacerbate this risk.
In a potential market crash, Bitcoin's behavior remains uncertain, as it has never existed in an environment without quantitative easing. However, Bitcoin has historically rebounded ahead of other risk commodities, such as gold. In the event of a crash, Bitcoin could fall precipitously but catch a bid ahead of other risk commodities, thanks partly to its inelastic nature. Given Bitcoin's reputation as digital gold, it is plausible that its price could reach $500,000 or even $1,000,000 in the long term.
