Bitcoin Drops Below $100K as US-China Trade War Escalates

Bitcoin (BTC) fell below $100,000 on February 4, dropping as much as 3.6% to $98,199, as renewed US-China trade tensions rattled financial markets.

Other major cryptocurrencies, including Ethereum (ETH) and Solana (SOL), also saw declines.

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What’s Driving Bitcoin’s Decline?

US-China Trade War Intensifies

  • The US imposed a 10% tariff on all Chinese imports, escalating tensions.
  • China retaliated with tariffs on US oil and liquefied natural gas (LNG) and launched an antitrust investigation into Google LLC.
  • Investor sentiment weakened, leading to a sell-off in risk assets, including Bitcoin.

Institutional Investors Pull Back

  • On Monday, US investors withdrew $235 million from Bitcoin exchange-traded funds (ETFs).
  • Open interest in Bitcoin futures on CME Group fell 4%, signaling reduced institutional confidence.

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Volatility and Market Uncertainty

  • BTC surged $10,000 in a single day after bouncing from $91,500, fueled by news that tariffs on Mexico and Canada would be delayed.
  • Bitcoin quickly reversed gains after China’s retaliatory measures were announced.
  • Analysts suggest BTC will need to hold $93K to remain on track for a new all-time high.

What’s Next for Bitcoin?

Despite short-term volatility, some analysts remain optimistic:

  • Crypto trader Michaël van de Poppe expects new all-time highs (ATHs) in February, provided BTC stays above $93K.
  • Funding rates in derivatives markets have turned negative for the seventh time this year—historically a bullish signal, according to CryptoQuant’s Axel Adler Jr.

With Bitcoin dominance near a four-year high, traders are closely watching economic and geopolitical developments to gauge the next move for BTC.

 

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