Bitcoin Price Drops Below $112,000 Amid US-China Trade Tensions
Bitcoin (BTC) trades below $112,000 on Tuesday. It struggles to break a key resistance level. The price weakness comes as US-China trade conflicts rise. This increases market uncertainty and risk-off sentiment. On Monday, Bitcoin spot ETFs saw outflows of over $320 million. This shows caution among institutional investors. Traders now watch Federal Reserve Chair Jerome Powell’s speech for possible market moves.
US-China Trade Disputes Hurt Bitcoin Recovery
Bitcoin started the week strong, closing above $115,000 on Monday. This followed a sharp drop last week. But on Tuesday, BTC fell below $112,000 as trade tensions worsened. The US and China plan new port fees on each other’s ships. China says its fees protect its shipping industry from unfair US measures. The US says its fees support American shipping companies.
New US tariffs on imported timber, kitchen cabinets, and furniture from China began Tuesday. China also announced rare earth export controls and held trade talks with the US. Meanwhile, US Treasury Secretary Scott Bessent said President Trump and Chinese leader Xi Jinping plan to meet in South Korea in late October. These trade issues create uncertainty and hurt riskier assets like Bitcoin.
Powell’s Speech May Trigger Volatility in Bitcoin
The US government shutdown is entering its third week. This weighs on investor confidence. Democrats and Republicans still disagree on funding. The Senate will vote again on the funding plan Tuesday. Market watchers expect Fed Chair Jerome Powell’s speech to give clues on interest rate cuts. This could cause volatility in Bitcoin and other risk assets.
However, the shutdown limits new economic data. Powell’s remarks may repeat last week’s message without new policy updates.
Institutional Demand for Bitcoin Shows Signs of Weakness
Institutional interest in Bitcoin fell early this week. Data from SoSoValue shows Bitcoin spot ETFs had $326.25 million in outflows on Monday. This was the second day of withdrawals since Friday. Continued outflows could push Bitcoin prices lower.
Large Wallets Increase Short Positions on Bitcoin
On-chain data reveals that a wallet called BitcoinOG increased its short position on Tuesday. It now holds over 4,394 BTC in shorts. BitcoinOG made over $160 million shorting BTC and ETH during last week’s crash. Two other large holders on Hyperliquid are also heavily shorting the market.
Bitcoin Price Outlook: Bears Control Momentum
Bitcoin recovered slightly on Sunday, closing above $114,900. It tested a key resistance near $115,137 on Monday. This level matches the 50-day Exponential Moving Average (EMA) at $115,472. BTC failed to hold above this zone and dropped to $112,000 on Tuesday.
If the price keeps falling, it could reach support at $107,245. The Relative Strength Index (RSI) is 42, below the neutral 50, showing bearish momentum. The Moving Average Convergence Divergence (MACD) also signals a bearish trend.
If Bitcoin recovers, it may retest the 50-day EMA near $115,472.
