Bitcoin Holds Above $114K Amid Economic Headwinds and Tariff Volatility
Bitcoin is trading above $114,000, losing more than 1% in value over the past 24 hours, but it has shown amazing strength after Friday's
Quick overview
- Bitcoin is currently trading above $114,000, experiencing a slight decline of over 1% in the last 24 hours after a significant liquidation event.
- Macroeconomic concerns, including weak US employment data and ongoing US-China trade tensions, are creating headwinds for Bitcoin's price recovery.
- Technical analysis indicates that traders are hesitant, leading to potential consolidation in Bitcoin's price as liquidity concerns and regulatory scrutiny persist.
- The emergence of long-dormant Bitcoin supply from the Mt. Gox collapse raises concerns about potential market impact if these coins are sold.
Bitcoin BTC/USD is trading above $114,000, losing more than 1% in value over the past 24 hours, but it has shown amazing strength after Friday’s disastrous $19 billion liquidation incident. Even while Bitcoin’s capacity to bounce back shows that institutional and long-term investors are still strong, a number of macroeconomic and technical factors are working together to perhaps push back a retest of the $125,000 mark and new all-time highs.
On Friday, the cryptocurrency market saw its biggest single-day liquidation ever. This was because President Donald Trump said that there could be 100% taxes on Chinese imports. Bitcoin dropped to $102,000 before rising by almost 13% to $115,000 by Sunday evening. The quick recovery shows that Bitcoin’s long-term demand is still strong, but traders and other people in the market are being careful, which could lead to more consolidation around present levels.
Macro Headwinds and US-China Trade Tensions Creating Headwind for Risk Assets
Bitcoin’s rise has been slowed down by ongoing macroeconomic worries that are making investors less willing to take risks. Weak US employment data has made some worry about a recession. In September, companies added only 17,000 positions, which is a big drop from August’s already low number of 22,000. This weakness has made investors look for safe-haven assets, which has pushed US Treasury rates near to 3.5% as demand for government-backed securities has grown.
The growing trade tensions between the US and China make things much more complicated. President Trump said on Sunday that a solution “should be worked out” before the tariff measures end on November 10, but nothing has happened yet. Scott Bessent, the Secretary of the Treasury, has called China’s rare earth export limitations “provocative,” which adds to the uncertainties in the world of politics. Bitcoin’s partial link with tech companies and its reputation as a risky asset will keep bullish momentum going as long as global economic growth and trade stabilization improve.
Liquidity Gaps and Regulatory Concerns Cloud Short-Term BTC Outlook
Technical study of Bitcoin’s futures markets shows that traders are hesitant, which might make consolidation take longer. The Bitcoin perpetual futures funding rate at Binance is still negative, which means that short positions pay for leverage. This causes arbitrage dislocations between exchanges. These gaps make it look like a big market maker may have gone out of business during Friday’s crisis, which makes liquidity providers hesitant to get back in.
This cautious behavior is shown by fewer market-makers and more worries about counterparty risk. Also, criticism from regulators after the Friday liquidation cascade has made people look more closely at how exchanges work. Platform providers are being accused of using unfair liquidation triggers and pricing methods. Traders are probably staying on the sidelines during recovery phases because they don’t trust the market structure.
On-Chain Data: Long-Dormant Bitcoin Supply Emerges
A group of Bitcoin addresses linked to the infamous Mt. Gox collapse moved 300 BTC (about $33.47 million) to Binance’s exchange wallet this week, adding to worries about supply in the near future. These coins were bought for about $11 each, and they’ve been sitting around for 13 years. There are still about 590 BTC in the same address group. The owner hasn’t said they want to sell, but the fact that these coins are currently in an exchange hot wallet instead of cold storage has raised concerns that dormant supply could come back into the market when prices are low.
Bitcoin Price Prediction: Consolidation Likely Before Sustained Rally
From a technical point of view, Bitcoin’s present holding pattern over $114,000 shows that the market is still processing Friday’s big drop. It will be very important for the US-China trade talks to end in a way that allows Bitcoin to break through $125,000 and reach new all-time highs. If the Kobeissi Letter’s “tariff playbook” leads to a successful deal announcement, markets could start to take on more risk again as soon as mid- to late-October, which would help a rally.
But if the talks about tariffs stop or go worse, Bitcoin might stay between $105,000 and $118,000 for a few weeks. The rise of Mt. Gox-era currencies in exchange wallets adds another risk that could limit gains if selling happens.
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