Bitcoin (BTC) fluctuated around the $80,000 mark as Wall Street trading opened on the 8th (local time). While the U.S. stock market's rebound had a positive impact on investor sentiment, the escalating trade tensions between the U.S. and China continue to limit Bitcoin's upward potential.
According to Cointelegraph Markets Pro and TradingView data, the S&P 500 and Nasdaq indices rose up to 4.3% in early trading, alleviating concerns from the previous day's sharp decline. The strong recovery in traditional financial markets (TradFi) mitigated fears of a large-scale collapse like the 1987 'Black Monday', but the market's focus remains on the prolonged U.S.-China trade dispute.
Moreover, President Trump stated through Truth Social that "China wants a deal but doesn't know where to start" and that "we are waiting for their call", suggesting that tensions between the two countries are unlikely to ease quickly. Consequently, market analysts propose that China's yuan devaluation could drive capital outflows towards alternative assets like Bitcoin.
Former BitMEX CEO Arthur Hayes analyzed on X (formerly Twitter) that "Xi Jinping's primary weapon is an independent monetary policy, which means a weak yuan", and claimed that either the People's Bank of China (PBoC) or the U.S. Federal Reserve (Fed) will provide fuel for a Bitcoin rally. He referenced capital inflows into Bitcoin during the yuan devaluation periods of 2013 and 2015, suggesting a similar trend could emerge this time.
Meanwhile, the possibility of a U.S. interest rate cut is also supporting optimism about Bitcoin. Global asset management firm AllianceBernstein stated in a blog post that "if the U.S. economy slows down, the Fed will cut rates even with high inflation". Economist Eric Winogrand added, "There have been instances of the Fed cutting rates during high inflation" and "forecasts a 75bp rate cut in mid-2025".
From a technical analysis perspective, there is significant interest in key support levels. Trader 'Titan of Crypto' analyzed that Bitcoin is receiving support at the Fibonacci 0.382 correction line near $73,500, and maintaining this price could continue the upward trend. Another trader, 'Daan Crypto Trades', also noted that the current price range aligns with the March 2024 high point, potentially forming a strong support line.
However, analysts still note that Bitcoin is trading below the 200-day simple moving average (SMA) of $82,000, indicating a cautious long-term view in the market. The Fed's future interest rate policy, China's monetary response, and potential changes in President Trump's tariff policy are expected to be key determinants of Bitcoin's direction.
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