China's Tariff Response Sends Bitcoin Back to $83K

Bitcoin’s price took a hit on Friday as global market tensions escalated following China’s announcement of sweeping 34% tariffs on all U.S. goods. The move, a direct response to the U.S.’s recent tariff increase to 54%, sent shockwaves through financial markets, dampening risk sentiment.

The leading cryptocurrency initially climbed to $84,600 before reversing course, plunging $1,600 to settle around $83,000, according to CoinDesk data . Altcoins followed suit, with major assets like Ethereum, Ripple, Solana, and Dogecoin erasing early gains.

Traditional markets weren’t spared either. Futures tied to the S&P 500 and Nasdaq tumbled over 2%, reflecting investor anxiety over the deepening trade conflict. “China's response is not just a blow to the U.S. economy but a global risk factor,” noted ForexLive analyst Justin Low.

With trade tensions heating up, market volatility is likely to persist, leaving traders on edge about Bitcoin’s next move.

Recent research by Glassnode, a leading on-chain analytics firm, indicates that Bitcoin investors who entered the market between 2020 and 2022 are holding onto their assets despite significant price gains. This trend suggests a strong belief in Bitcoin's future potential, even as the cryptocurrency's price approaches historic highs.

Glassnode's analysis highlights a distinction between different investor groups based on when they entered the market. Investors who bought Bitcoin between 2020 and 2022 continue to hold a significant portion of their wealth, despite a slight decline in their share since November 2024. In contrast, those who purchased Bitcoin five to seven years ago have largely exited their positions, reflecting their lower cost basis.

Short-term holders, who are more speculative, have shown greater sensitivity to recent price fluctuations. Episodes of panic selling have occurred as Bitcoin reached new highs and then dropped by up to 30% over the past six months. However, STH participation remains below previous cycle tops, suggesting a more stable market environment.

The current market dynamics indicate a more tempered bull run compared to previous cycles. Short-term holders currently hold about 40% of Bitcoin's network wealth, significantly lower than the 70-90% seen in past peaks. This trend, combined with the resilience of midterm holders, points to a market where investors are cautiously optimistic about Bitcoin's future prospects.

As Bitcoin continues to navigate its current price trajectory, investors are watching closely for signs of whether this stability will lead to another significant price rally or if market conditions will shift in response to broader economic factors.