The US-China trade tensions are weighing down on cryptocurrencies.

Bitcoin is once again caught in the whirlpool of risky geopolitical tensions. This time, the spillover effect is being felt in every corner of the crypto market. This scenario is no longer unfamiliar: The resurgence of trade tensions between America and China has triggered a strong correction in Bitcoin, reflecting a pattern that emerged earlier this year. As tariffs increase, causing risky assets to plummet continuously for weeks, the price of BTC has fallen by as much as 30%.

US-China Trade Tensions: Another Macro Shock, Another Bitcoin Fall

A traditional “Uptober” began with a nearly 18% price increase of Bitcoin that quickly turned negative after President Trump announced new 100% tariffs on imported goods from China and strict export control regulations on critical software.

The market reaction was very quick. The price of Bitcoin has fallen more than 13% from over 126,000 USD, at one point dropping to a low of 107,000 USD, as more than 19 billion USD in leveraged positions were wiped out in just a few days, including over 9.4 billion USD within 24 hours.

Trade news has spread to the crypto market, creating a feeling of having experienced it in the past. The memories of the correction from March to May, when a similar geopolitical crisis led to a fall of 30% lasting nearly three months, cannot be overlooked.

Liquidity stress and contagion

Behind the price fluctuations, the mechanisms are very clear and ruthless. As volatility increases, liquidity on exchanges has become fragmented. The altcoin market is disconnected, increasing the selling pressure. The collapse of the stablecoin USDE and a series of liquidations have shown the tight correlation between crypto liquidity and global macro risks as well as shocks from Washington and Beijing.

Even when the Fed stimulates risk sentiment with dovish statements, the speed and brutality of the deleveraging has exposed a structural weakness. Cryptocurrency is a high-beta liquid asset, and as systemic risk increases, it will be punished.

Resilience of structure under chaos

However, amidst the volatility, the industry shows no signs of giving up. Institutional portfolios may have mitigated risks, but Bitcoin's position as a macro hedge appears to remain intact. Currently, there are over 172 public companies holding Bitcoin in their treasuries. And even as ETF inflows increase, retail investors have poured over 1.1 billion USD into the spot market during this price drop.

Nevertheless, headwinds are likely to persist; economists note that similar price declines in the past often weren't resolved until risk appetite returned nearly three months later.

Currently, Bitcoin is struggling to hold the support level above 107,000 USD, and October is turning into a war of attrition. All eyes are still on the US-China trade tensions. If the scenario from March to May repeats, the volatility caused by macro factors could extend until November before Bitcoin's long-term trend continues.

In this context, the current volatility is not a flaw, but a characteristic of the market. If history is any guide, recovery in the crypto market will not come from predictions, but from the gradual return of risk appetite and liquidity.

Mr. Giáo