Bitcoin continues to decline after rebounding massively during the previous intraday session. The recovery follows a significant dip to its lowest level in almost thirty days.
The apex coin failed to continue it upticks on Tuesday as trading sentiment became bearish. It enjoyed a significant uptrend on Monday following its dip to a low of $91,530 after it opened the day at $97,670. It was on the of losing almost 10%.
BTC rebounded, erased all of its losses and reclaimed the $100k level and peaked at $102,569 but closed lower than it high. Gaining almost 4% and halting its three-day downtrend, investors expected further uptrends. However, price action shows that the reverse is the case.
The apex coin has almost erased all the increases it accrued on Monday. It started its downside movement shortly after the trading session started.
What Caused the Dip?
It is worth noting that the sudden rebound Bitcoin and other cryptocurrencies experienced on Monday was due to the secession of the trade war.
Seeing the effect of such tariff on its economy and its neighbors, the US announced the postponement of the US tariff on Canada and Mexico.
However, the market lost its fuel as China announced a 10% duty on US goods on Tuesday. The latest development comes in response to the 10% duty the US imposed on imports from China. China’s tariff increase targets key commodities such as oil, coal, and agricultural equipment.
If the United States fails to reach an agreement with the Asian giant, the new tax will take effect on February 10. It is also worth noting that Beijing announced an antitrust probe into Google and added several US companies as tension rises.
Is There An End In Sight?
While some economists warn about the implications of the trade wars on the US and world economy, others express a positive impact on the crypto market. They argue that the ongoing tension will weaken the dollar and other currencies, giving Bitcoin and other cryptocurrencies the fuel to rise.
It is worth noting that importers from both sides of the conflict will increase the price of these commodities to stay in profit. This may result in an increase in CPI and blare inflation warnings. In recent times, a negative CPI caused notable declines across the market.
The effects of the trade war will continue on the crypto market and other sectors. However, as the biggest economies are fighting each other, it is hard to predict its end. Time will answer this question.
Bitcoin Dips to $97k
Bitcoin trades at $96,900 at the time of writing. Its latest slip came after the Bulls lost the $98k support. They held the mark for most of the day. However, the selling pressure increased, sending prices lower. Prices remain relatively stable at $97,000.
Indicators like the relative strength and accumulation/distribution charts print sell signals. They display a notable increase in selling volume, resulting in the ongoing downtrend. Nonetheless, the coin is trading above the 23% fib level. The bulls may defend this mark as a previous decline halted around it.
A slip below this key level may result in further declines and an almost inevitable retest of the $92k support.