Bitcoin Recovers After Sharp Selloff Amid US-China Trade Tensions

New York, NY — Bitcoin is rebounding from a significant drop on Friday, still falling short of its recent peak. The cryptocurrency experienced a steep downturn, plummeting to approximately $107,000, which prompted a record liquidation event that wiped out $19 billion across the crypto market.

The price drop coincided with President Donald Trump‘s announcement of new tariffs on Chinese imports, raising concerns about escalating trade tensions between the U.S. and China. Following this announcement, Bitcoin’s value began to recover after Trump reassured that “it will all be fine” with China.

On Monday, Bitcoin was trading at around $116,000, recovering from Friday’s low but still down about 8% from its record high of over $126,000 set just a week prior. Despite the recovery, analysts are closely monitoring key price levels that could dictate the future trajectory of Bitcoin.

After hitting a new high last week, the rapid decline raised the possibility of a bearish trend. The cryptocurrency found support near its lower trendline on Monday, showing resilience. The key levels to watch include $107,000 for immediate support, with a significant decline predicted if Bitcoin falls below that threshold, potentially dropping to $93,000.

It is also crucial to observe resistance levels near $123,000 and $126,000 to gauge Bitcoin’s ability to regain upward momentum. A breakout above recent highs could see prices reaching $139,000.

During the same timeframe, other cryptocurrencies like Ethereum and XRP also saw gains after significant losses. Ethereum rebounded to $4,157 after trading below $3,500, while XRP tested critical resistance at $2.64, reflecting a broader recovery in the market.

Analysts cite that rising institutional demand through Bitcoin ETFs and strong longer-term holder behavior could stabilize the market after last week’s turbulence. The overall sentiment is cautiously optimistic as Bitcoin’s technical indicators show signs of potential rebound.