Analysts see near-term downside for BTC as geopolitical pressure, reduced leverage, and policy uncertainty weigh on sentiment.
The world’s largest cryptocurrency, Bitcoin, is struggling to sustain upward momentum as renewed trade tensions between the United States and China and U.S. President Donald Trump’s expanded tariff measures add fresh pressure to global risk assets.
After rebounding from last week’s correction, Bitcoin hovered around $108,000, but traders remain cautious amid a fragile macroeconomic backdrop. Market data indicate that despite steady accumulation by U.S. spot investors, futures markets are dominated by short positioning and low leverage appetite — a combination that could limit BTC’s upside in the near term.
“The market wants to go higher, but macro policy is holding it back. Traders are hesitant to open new long positions until there’s more clarity on tariffs and inflation data,” explained Mark Hastings, a senior analyst at DigitalWave Research.
Tariffs and Shutdown Weigh on Investor Confidence
Trump’s decision to broaden tariffs on Chinese imports has reignited fears of a new trade war, rattling equity and commodity markets. At the same time, the record-length U.S. government shutdown continues to curb investor confidence, pushing many risk-averse participants to the sidelines.
Blockchain data show a sharp divergence between spot and derivatives activity. While spot Bitcoin ETF inflows and Coinbase’s Premium Index indicate accumulation by retail and institutional buyers, Binance futures traders have been increasing short exposure, signaling persistent bearish sentiment.
“The imbalance between spot demand and leveraged shorts is creating tug-of-war price action. As long as the policy narrative is uncertain, we’ll see volatility without clear direction,” noted Sofia Lin, macro strategist at Horizon Alpha.
Short-Term Volatility Expected Ahead of Key Data
Analysts are watching key liquidation levels between $106,000 and $104,000, where a cluster of leveraged long positions could be flushed if selling pressure intensifies. Conversely, shorts risk being squeezed if Bitcoin rallies toward $115,000.
According to Quinn Thompson, CIO at Lekker Capital, the recent market shakeout “cleared more leverage than any period earlier this year,” potentially setting the stage for a stronger recovery once macro uncertainty eases.
For now, however, tariff-driven volatility and muted futures participation suggest Bitcoin may struggle to reclaim its recent highs.
In essence, while spot accumulation signals long-term confidence, short-term macro risks — especially Trump’s tariff escalation — continue to overshadow Bitcoin’s bullish potential.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.