Bitcoin fell 4.72% over the weekend and another 3.50% during Monday’s Asian session as tensions driven by Trump’s tariffs have investors derisking their positions.
Over the weekend, China responded to Trump’s tariffs by indicating interest in imposing tariffs on US goods, while Canada imposed a 25% tariff on CA$155 billion worth of US goods.
Bitcoin tumbled below $100,000 over the weekend, extending losses into today as threats of a possible trade war rock markets worldwide.
While most of Bitcoin’s price decline came this weekend, weakness began when its price failed to swing higher than the $108,000 level two weeks ago (Jan. 20).
A failure to swing higher can signify insufficient buy pressure to push prices higher. If that is the case, prices will seek the next major liquidity level, which could mean lower prices in the interim, as seen over the last two weeks.
Scaling down to a lower time frame, price continued to break lower below $99,000 before retracing to an internal supply zone between the 50.00% and 61.80% Fibonacci levels (the golden zone for retracements) on Thursday, Jan. 30.
After being rejected by internal supply, the price broke down further on Friday, Jan. 31, and over the weekend to settle at the next major demand level, between $92,000 and $96,000.
Bitcoin’s price has found some support at $92,000 and is currently up 4.92% from Asian lows of $91,176.
Wider trade wars stifle markets
Meanwhile, the wider economic landscape faces uncertainty as a brewing trade war between the US and several of its trade partners, including Canada, Mexico, and China rocks various markets.
The US tariffs on its largest trade partners, which include a 25% tariff on imports from Canada and Mexico, and a 10% tariff on Chinese imports have sparked tensions between nations.
In response, Canada imposed a 25% tariff on CA$155 billion worth of US goods, Mexico has announced tariffs on US goods but has not provided details, while China also announced plans to impose retaliatory tariffs on US goods.
The result is uncertainty around the expansion of global trade and a derisking of portfolios, with cryptos being one of the first on the chopping block.
