Bitcoin at Risk of $1.3 Billion Liquidation as Trade War Concerns Weigh on Price

Bitcoin at Risk of $1.3 Billion Liquidation as Trade War Concerns Weigh on Price

Bitcoin’s price is teetering on the brink of a critical support level, with global trade war concerns threatening to push it below $93,000. A breakdown below this key level could trigger a significant liquidation event, potentially wiping out over $1.3 billion worth of leveraged long positions across crypto exchanges.


Bitcoin Faces Key Support Level at $93,000

On February 4, Bitcoin fell below the psychological $100,000 mark, driven by a shift in market sentiment spurred by escalating trade war tensions between the U.S. and China. As concerns over new tariffs between the two global superpowers intensify, Bitcoin’s price faces downward pressure, and traders are closely watching the $93,000 support level.


Ryan Lee, Chief Analyst at Bitget Research, suggests that for Bitcoin to avoid a more significant correction, it needs to close the week above the $93,000 mark. “Watch for Bitcoin’s support at $90,500, $93,000,” Lee advised, noting that if Bitcoin drops below $90,500, it could signal a more bearish market trend.


Data from Coinglass shows that if Bitcoin falls under $93,000, it could trigger around $1.3 billion in liquidations of leveraged long positions. This would lead to increased volatility and further downward pressure on the price, exacerbating the risk for traders caught in these positions.


Trade War Concerns and Their Impact on Bitcoin

The ongoing trade war between the U.S. and China has introduced an element of economic uncertainty that could further undermine Bitcoin's current position. New tariffs, which could affect hundreds of billions of dollars in trade, have investors on edge, impacting traditional markets and spilling over into the cryptocurrency space.


While macroeconomic uncertainty typically weighs on risk assets, including Bitcoin, the trade war presents a complex situation for the cryptocurrency. James Wo, founder and CEO of venture capital firm DFG, highlights that although trade tensions may lead to short-term instability for Bitcoin, they could ultimately work in Bitcoin’s favor.


“Trade war concerns may fuel inflation and the devaluation of the U.S. dollar, which could drive more investors to Bitcoin as a hedge against fiat devaluation,” Wo told Cointelegraph. “This is exactly what Bitcoin was designed for: to act as a store of value against traditional fiat currencies under pressure."


Potential Delays in Trade War Negotiations

Market participants are now looking to upcoming talks between U.S. President Donald Trump and Chinese President Xi Jinping, hoping that discussions could ease the tensions and prevent a full-scale trade war. Trump had been scheduled to meet with Jinping on February 11, but reports emerged on February 4 indicating that the meeting could be delayed. According to a Wall Street Journal report, two unnamed U.S. officials revealed that the meeting will not take place as originally planned.


The outcome of these discussions could have significant ramifications for both the global economy and the cryptocurrency market. A resolution to the trade tensions could help calm the markets, while prolonged uncertainty may continue to drive volatility, leaving Bitcoin's price vulnerable.


Conclusion: Bitcoin's Vulnerability and Potential

Bitcoin’s price remains in a fragile state as it approaches key support levels. The ongoing trade war between the U.S. and China could act as a catalyst for further market instability, potentially triggering massive liquidations if Bitcoin breaks below $93,000.


However, some experts believe that Bitcoin’s role as a hedge against inflation and fiat currency devaluation could position it to benefit in the long run, even if short-term volatility persists. With global financial markets closely watching developments in the trade war and awaiting news from U.S.-China negotiations, Bitcoin’s price may experience significant swings in the coming days.


Investors will need to monitor Bitcoin’s price closely in the near future, as the $93,000 support level could prove pivotal in determining the next phase of the market’s direction.

Disclaimer: The content on this website is for informational purposes only and does not constitute financial or investment advice. We do not endorse any project or product. Readers should conduct their own research and assume full responsibility for their decisions. We are not liable for any loss or damage arising from reliance on the information provided. Crypto investments carry risks.