U.S. President Trump is expected to meet Chinese leader Xi Jinping later this month, with trade tensions likely to persist afterward.
Bitcoin fell below $108,000 as traders assess lingering macroeconomic risks, mainly trade tensions between the U.S. and China.
According to The Block’s crypto price page, bitcoin fell 2.6% in the past 24 hours to $107,854 as of 1:40 a.m. ET Tuesday. The cryptocurrency had briefly rebounded above $111,200 on Monday after recovering from a three-day slump.
One analyst told The Block that crypto prices may continue to exhibit similar volatility in the near term.
“We simply believe that macro concerns are driving day-to-day changes in the market,” said Jeff Mei, COO at BTSE. “Volatility will continue as long as there [are] trade tensions between the U.S. and China.”
Mei added that the latest decline was primarily driven by traders derisking ahead of the upcoming meeting between Chinese leader Xi Jinping and U.S. President Trump, scheduled to take place in South Korea at the end of October.
“While it’s possible that they may come to an agreement at the end of the month and cause markets to rally, it’s unlikely that tensions will evaporate altogether,” Mei added.
Macro headwinds also dragged down major altcoins, with ether slipping 4.77% to $3,855, BNB falling 5.36%, and Solana losing 4.26%
Spot crypto exchange-traded funds saw outflows on Monday. Spot BTC ETFs reported $40.5 million in net outflows, while spot ETH ETFs saw $145.7 million move out from the fund, according to SoSoValue data. This came after BTC ETFs recorded their second-largest net weekly outflows last week, worth $1.23 billion.
With retail and institutional both showing unfavorable numbers, The Block’s Fear and Greed Index stands at 29, which indicates fear among market participants.
“The biggest risk to crypto markets today is the fact that macro developments and trade discussions are unpredictable — markets can rise and fall at the whims of a single tweet,” Mei said. “All investors can really do is diversify their assets and attempt to hedge against uncertainty.”
Traders, hopeful for another interest rate cut this month and an early end to quantitative tightening, now look to Friday’s release of the consumer price index data, an important inflation indicator.
CME Group’s FedWatch Tool currently indicates a 98.9% chance that the Federal Reserve may cut rates by 25 basis points.
