US-China Economic Cold War Impact On Bitcoin Price

Amid geo-political and economic tensions in the world, crypto prices have been feeling the heat. The US-China faceoff comes with an added layer of complexity in this scenario.

That said, US President Trump backing off on tariffs was critical to pushing Bitcoin and overall crypto prices out of a funk.

However, recent info reveals that the latest recovery may have been based on false optimism. That it risks possible erosion of recent gains.

The latest Bitcoin price rally kicked off after Trump stated that he was pursuing talks with China to negotiate lower tariffs. However, China recently disputed the claims revealing that no such negotiations were underway.

But could this revelation undermine the recent market recovery? Nevertheless, Bitcoin’s bullish momentum slowed down considerably in the last 3 days. This was also characterized by a slight market sentiment dip from its weekly high of 72 to 60 at the time of observation.

The market still showed resilience despite the slight sentiment dip. But, the fate of Bitcoin bulls in the short term could lean towards uncertainty. Especially with tensions rising between the two trade titans.

Will BTC Price Pivot Under the Weight of Economic Uncertainty?

Further decline in Bitcoin (BTC USD) sentiment will likely be accompanied by a retracement especially if the tariffs situation gets worse. Especially considering that past tariff escalations had a clear impact on investor sentiment and their investment decisions.

As noted earlier, Bitcoin’s upside slowed considerably in the last 3 days. This is an important observation because price also pushed into a short term resistance zone above the $95,000 price level.

Bitcoin price action previously experienced resistance at the same price zone at the start of March. In addition, price was creeping up overbought territory at the time of observation.

Bitcoin spot flow data indicated that some profit-taking occurred in the last 3 days. The cryptocurrency experienced a total of $791.68 million worth of spot outflows.

However, it is worth noting that Bitcoin whales and institutions demonstrated aggressive interest in the cryptocurrency.

Why Bitcoin Demand Remained Strong Despite Trump’s Bluff

While potential for a bearish pivot at recent price levels was elevated, market data indicated robust demand. For example, the gap between exchange inflows and outflows continued to widen in the last 24 hours, in favor of more outflows than inflows.

Exchange inflows in the last 24 hours hovered at $56,981 BTC wile outflows were notably higher at 90,998 BTC. In other words, exchange flows signaled significantly higher demand than sell pressure.

The observation indicates that there was still a lot of confidence in the market. But it may not necessarily be a guarantee of more upside.

The lack of a US-China deal has certainly dented sentiment, and nowhere was this more apparent than in Bitcoin ETF flows.

Only $31.9 million worth of positive flows into ETFs was observed on Friday. This was the lowest inflow observed during the week. An outcome which suggests that institutions pulled back slightly perhaps to assess the demand situation, as well as the macro-economic outlook in light of recent information.

So, why did institutions not start selling yet instead? The answer could be hidden in past outcomes. There were instances in the past where Bitcoin news triggered a specific market reaction, only for the news to turn out false days later.

However, the actual news hits the market further down the road, usually within days, validating the initial move. Some analysts believe that such a scenario could be the ongoing situation with BTC and that Trump’s softer stance could still support a more favorable market environment.

On the other hand, market participants are still waiting to see whether knock-on effects could still have a heavy hand in the market’s recovery.

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