Bitcoin price volatility was dialed up all the way to 11 in the last 24 hours as a wave of FUD swept across the market.
This latest bearish outcome occurred after Trump announced plans to hit China with 100% tariffs.
The Fresh tariff war escalation has analysts wondering whether this will send Bitcoin price below $100,000.
The cryptocurrency experienced robust downward pressure during the last time that tariffs rocked the markets earlier this year.
Bitcoin price respected a short term ascending support just above the $110,000 in its latest retracement.
However, the threat of tariff war escalation could potentially fuel more pressure against the cryptocurrency.
Bitcoin could potentially drop to the next support level near $100,000 if it loses its current support level.
There are a few scenarios that could fuel the bearish momentum and that includes the reason for the latest downside.
A Cocktail of Tariff-Induced FUD May Extend the Bitcoin Price Downside
Bitcoin price remained suppressed during the previous tariff war escalation earlier this year. It embarked on a substantial recovery once President Trump announced a pause on tariffs.
A similar outcome may occur this time, hence the markets will be highly sensitive to tariffs-related developments. Liquidations also played a key role in the BTC price retreat.
Cryptoquant data revealed that about $5.3 billion worth of total liquidations occurred in the last 24 hours.
This marked the highest single‑day liquidation event that Bitcoin has ever experienced. The bulk of those liquidations were longs at about $4.63 billion.
The massive liquidation event triggered a long squeeze event which further extended Bitcoin price downside.
The flash crash was also accompanied by significant accumulation from the whales. This led to some recovery as some market participants took advantage by swiftly buying back at discounted prices.
However, this was also accommodated by a brief spike in negative funding rates. The recovery also encouraged a surge in positive funding rates, signaling that some traders were entering leveraged long positions.
Here’s Why Bitcoin Price May Still Push Down Further
One of the key reasons why whales were buying was because Trump’s threat to impose 100% tariffs on China was not expected to take effect until November.
This means the market has slightly over two weeks to adjust for the event. Nevertheless, the bearish expectations brought about by the threat of escalating tariff wars could still hammer down on BTC market sentiment.
This combined with the recent wave of liquidations may also put investors in a cautious mood for the next few weeks.
It is also worth noting that the period between now and November may also be enough for the U.S. and China to solve their differences.
Possibly enough for Trump to adopt a softer stance on tariff. This potential outcome could inject confidence back into the market.
In the meantime, Trump has also been facing backlash in the last few hours due to his tariffs threats.
Critics accused him of market manipulation given the fact that the latest crash occurred just after the markets experienced record levels of bullish open interest.
Some traders executed leveraged short positions just before Trump’s announcements. A newly created account opened a short position about 30 minutes before Trump’s announcement,
It made over $88 million worth of profits. Such trades further enforced the market manipulation argument.