Bitcoin hits a wall: Market pressures from trade conflicts and macroeconomic uncertainties

Amid a series of trade tensions and macroeconomic concerns spanning China and other major regions, Bitcoin is facing a negative market reaction. Last weekend’s volatility exposed the vulnerability of digital assets to indirect geopolitical and political factors, as investors reassess systemic risks in the global context.

Escalation of Trade Conflicts in China and Impact on BTC

The aggressive trade policies of the Trump administration, targeting both Canada and China, have created an environment of uncertainty in financial markets. The use of tariffs as a tool to pressure China and other states has intensified investor nervousness. History shows that retaliatory trade measures from major trading partners have led to adverse outcomes in asset markets, and Bitcoin is no exception.

Bitcoin’s turnover rate has increased significantly, reflecting a state of panic among holders. The price of Bitcoin is around $69.50K, down 2.66% in the last 24 hours, illustrating downward pressure amid these turbulences.

Risks of a Federal Shutdown and Kalski Predictions

The probability of a potential US government shutdown, estimated at 78.5% according to the Kalski prediction platform due to unresolved budget issues by January 31, adds a new layer of uncertainty. Although it may not be as comprehensive as last October’s event, which severely affected government operations, some departments have already secured funding for extended periods, which could mitigate short-term consequences.

Market Dynamics and Investor Outlook

In addition to trade turbulence and government risks, there are speculations about possible intervention by the United States and Japan in the yen exchange rate market. Although less severe than the tariff crisis, such intervention could disrupt arbitrage strategies and particularly impact positions based on borrowing in yen.

The reaction of Asian investors and subsequently the US markets in the coming hours and days will become key indicators of market sentiment. The situation remains tense in China and beyond, with all market actors awaiting further clarifications from geopolitical and macroeconomic factors influencing Bitcoin’s volatility.