How Did the US-China Tension Affect Bitcoin?

Bitcoin Price Decline

Recently, the tensions between the US and the EU have negatively affected the cryptocurrency markets. Analysts emphasize that the pressure created by these geopolitical uncertainties on Bitcoin and other crypto assets is increasing.

Reasons Behind the Tensions

The cryptocurrency market started the new week on a negative note due to the escalating conflicts over the Greenland issue. Bitcoin tested $92,000 while the total market value fell to around $3 trillion. According to Coinglass data, $750 million worth of long positions were liquidated within just four hours following this decline.

Market Sentiment

Presto Research analyst Min Jung stated, “The cryptocurrency market continues to show its weakness compared to other asset classes. The impact of the US-EU conflicts on the market is becoming more pronounced.” He indicated that investors tend to shift towards other options instead of risky assets.

Customs Tax Fears

Former US President Donald Trump's threat to raise customs taxes on imports from NATO allies if Denmark does not agree to sell Greenland has brought the trade war back to the agenda. European leaders condemned this situation harshly, labeling it as blackmail, and stated that a potential trade war would increase tensions.

EU's Response

EU officials are working on retaliatory measures against the attacks from America. These measures include restrictions on US services and the implementation of new taxes.

Cryptocurrency Market Structure Bill

BTC Markets analyst Rachael Lucas expressed that the current situation has created additional uncertainty in the markets. She also added that the suspension of the cryptocurrency market structure bill further negatively impacted the already deteriorating market sentiment.

Bitcoin entered a visible consolidation process after hitting its peak two years ago. However, Lucas noted that this situation is not comparable to past crypto winters, as the sector has access to more constructive regulatory signals today.