Trump Says China Tariffs 'Won't Stand' — But Bitcoin Crashes 5% Anyway
News Summary
Despite US President Donald Trump stating that high tariffs on China "will not stand," easing trade tensions, Bitcoin (BTC) still fell below $104,000, crashing 5% on the day. Trump's comments failed to halt Bitcoin's decline, reflecting persistent caution across risk assets, with crypto markets still weighed down by tightening liquidity and weak inflows. Data indicates Bitcoin recorded over $1.66 billion in cumulative outflows over the past five sessions, including $365 million on October 17 alone, signaling continued portfolio de-risking by both institutional and retail participants. This selling pressure has drained short-term liquidity, making the market more vulnerable to price swings. Technical analysis confirms Bitcoin's breakdown below $108,000, where the 200-day exponential moving average (EMA) previously acted as strong support. The breach shifts focus toward $103,500 as the next short-term demand zone, while $100,000 remains the main psychological and structural support level. Momentum readings also show continued weakness, with the RSI dropping to 34, near oversold territory, and major moving averages turning lower in alignment with the bearish trend.
Background
In 2025, Donald J. Trump, having been re-elected as US President in November 2024, continues to see his administration's trade policies, particularly regarding tariffs on China, significantly influence global market sentiment. Trump's comments on tariffs historically have caused market volatility, especially given his prior imposition of substantial tariffs on Chinese goods during his first term. Bitcoin, as a global risk asset, is highly susceptible to macroeconomic factors, geopolitical developments, and shifts in market liquidity. In 2025, investor perceptions of its role as a safe-haven or inflation hedge, and its correlation with traditional market assets, remain a subject of ongoing debate. Technical analysis plays a crucial role in cryptocurrency trading, with many traders relying on key support and resistance levels to inform their decisions.
In-Depth AI Insights
Why did Trump's seemingly positive comments on China tariffs fail to halt Bitcoin's decline? - Geopolitical Risk Already Priced In: Investors may have already factored in potential dovish shifts in Trump's China trade policy, or perceive his comments as short-term rhetoric with underlying policy uncertainties remaining. - Liquidity and Technicals Dominate: The article explicitly states that Bitcoin's fall was primarily driven by tightening liquidity, persistent outflows, and the breach of key technical support levels, indicating that internal market dynamics outweighed external macro news. - Strong De-risking Sentiment: In an uncertain macroeconomic climate, institutional and retail investors are broadly inclined to reduce exposure to risk assets, making it difficult for even seemingly positive news to reverse this deep-seated de-risking trend. What are the deeper implications of sustained crypto outflows and tightening liquidity for the digital asset market in 2025? - Impaired Price Discovery: Drained liquidity can exacerbate price volatility, making it harder for the market to achieve efficient price discovery, thereby increasing trading risk and uncertainty, and deterring new capital inflows. - Signal of Structural Weakness: Large and consistent outflows may not merely be a short-term correction but could reflect investor skepticism about the long-term value narrative of cryptocurrencies or concerns over future regulatory environments. - Shift in Capital Allocation Patterns: Institutional investors might reallocate capital away from high-risk, volatile digital assets towards more traditional safe-havens or yield-generating investments, altering overall market capital allocation patterns. Given the threat to the critical psychological support level of $100,000 for Bitcoin, what strategic plays might institutional investors consider if this level is breached? - Expanding Short Positions or Hedging: Some institutions might utilize a technical breach of $100,000 as an opportunity to further short or increase existing short positions, aiming to profit from further price depreciation or hedge their spot holdings. - Accumulation at Deeper Support: Other institutions might view this as a buying opportunity, waiting for prices to drop to the next major technical support zone, such as $92,000, to accumulate Bitcoin at a more attractive valuation, anticipating future rebounds. - Re-evaluation of Risk Exposure: Regardless of the immediate strategy, a breach of $100,000 would prompt a comprehensive re-evaluation of crypto risk exposure and portfolio allocations by institutional investors, potentially leading to a reduced overall allocation or a shift towards more stable digital assets.