"Crypto Plunge: US-China Trade Tensions Spark Market Turmoil"

Cryptocurrencies plunged on Tuesday as escalating trade tensions between the US and China rattled markets. Bitcoin, the largest cryptocurrency, fell as much as 3.6% to $98,199, while other major tokens including Ether and Solana also lost ground. The sell-off 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.

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. China also said it will investigate US tech giant Google LLC for alleged antitrust violations. The renewed market turbulence dealt a blow to investor confidence in risky assets, with US investors pulling a net $235 million from a group of 12 Bitcoin-focused exchange-traded funds on Monday. Open interest in Bitcoin futures contracts on CME Group Inc.'s derivatives exchange also fell 4%, signaling a more cautious approach among institutional players.

Bitcoin dropped below $100,000 on Feb. 4 as fresh trade war fears punctured a snap rebound. Data from CoinGecko and CoinMarketCap showed BTC/USD reversing about 3% after the daily open. Markets had surged on news that US tariffs on Mexico and Canada would be delayed by a month, along with President Donald Trump signing an executive order to create a first-of-its-kind sovereign wealth fund. However, progress was halted when it emerged that China was retaliating against US tariffs with its own measures targeting oil, coal, and more.

Funding rates across derivatives markets gave Axel Adler Jr., a contributor to onchain analytics platform CryptoQuant, cause for celebration. Funding rates had printed a key bull signal during Bitcoin's trip toward $90,000. For the seventh time this year, the Bitcoin Funding Rate had turned negative, with the first such instance coming in April 2024. All six previous instances signaled a bullish momentum. Meanwhile, on Bitcoin's relative strength index (RSI) flashing a similarly rare upside signal on 4-hour timeframes.