Bitcoin’s price dropped below $100,000 on Feb. 4, as concerns over the global trade war between the United States and China affected market sentiment. The U.S. announced new tariffs on Chinese imports, creating uncertainty that pushed Bitcoin’s price down and led to fears of a large liquidation event. If Bitcoin fails to hold its key $93,000 support level, analysts warn it could trigger liquidations of up to $1.3 billion in leveraged long positions across all crypto exchanges.

Ryan Lee, chief analyst at Bitget Research, highlighted that Bitcoin’s short-term prospects depend on its ability to maintain support at the $93,000 level. A fall below $90,500 could signal a bearish trend, which would likely worsen market sentiment. These price levels are seen as crucial in determining Bitcoin’s near-term future. However, some analysts believe that Bitcoin’s drop could be temporary, given its history as a hedge against traditional finance volatility.

James Wo, CEO of DFG, explained that while the trade tensions between the U.S. and China may create immediate downward pressure on Bitcoin, the situation could eventually drive demand for Bitcoin as a hedge against inflation. A weakened dollar due to trade disputes might push investors toward Bitcoin, which was originally designed to serve as a store of value and an alternative to fiat currencies. As inflation rises and confidence in traditional currencies decreases, Bitcoin’s appeal as a decentralized asset could increase.

The ongoing trade war has created significant volatility, and market participants are waiting for President Donald Trump’s upcoming meeting with Chinese President Xi Jinping, scheduled for Feb. 11. However, reports surfaced on Feb. 4 that the meeting had been delayed, adding to the uncertainty surrounding the situation. The trade tensions between the two largest economies in the world could have far-reaching consequences for global markets, including the cryptocurrency market.

The market’s mood is currently bearish, reflected in the Crypto Fear & Greed Index, which has dropped to a “Fear” score of 46, down from 60 the previous week. This negative sentiment could dampen retail investment, while professional investors remain cautiously optimistic. Many are watching how Bitcoin responds to the current market conditions, particularly concerning the impact of the trade war and possible tariffs.

At the time of writing, Bitcoin’s price is hovering around $96,081. If it can hold its ground and avoid further decline below $93,000, Bitcoin may still see a rebound. However, it faces a challenging road ahead, as global economic factors and trade tensions continue to weigh on its short-term outlook.