BTC Holds Steady Near $111K Amid Investor Caution Over China Retaliation

Bitcoin Steadies Near $111K Amid China Trade Tensions and Market Caution

Bitcoin (BTC) remained near $111,000 Thursday afternoon Hong Kong time, holding steady after recent volatility as China’s retaliatory trade measures against the U.S. reignited global risk aversion.

Analysts highlight that Bitcoin’s correlation with gold has reached a multi-year high of 0.9, reinforcing its “digital gold” status, as both assets tend to move in tandem during geopolitical shocks.

The broader crypto market stayed cautious, with total capitalization around $3.8 trillion. Major tokens traded near recent levels: Ether (ETH) close to $3,940, BNB at $1,180, Solana (SOL) above $190, while DOGE outperformed with a 4% daily gain and 21% weekly rise.

Market watchers describe the recent pullback as consolidation rather than panic, following last week’s record $19 billion liquidation event. On-chain analytics firm CryptoQuant called it a “controlled deleveraging”, signaling measured market adjustment rather than a panic sell-off.

Sentiment data reflect ongoing caution. The FxPro fear index fell to 34, with traders defending the $109K–$110K range, which has acted as a floor since August. FxPro analyst Alex Kuptsikevich said, “The bears seem to have had their fill. Potential buyers are waiting for a clearer reason to add risk, and trade tensions aren’t that reason yet.”

On-chain signals remain constructive. CryptoQuant’s Ki Young Ju emphasized Bitcoin’s strong correlation with gold, underscoring its role as a store of value amid macro uncertainty.

Ethereum developments also point to long-term confidence. Developers advanced testing of the Fusaka upgrade on Sepolia, while Bhutan announced plans to migrate its national digital ID system from Polygon to Ethereum by early 2026, highlighting institutional trust in the network.

Institutional flows continue to provide stability. Nassar Achkar, Chief Strategy Officer at CoinW, noted, “Despite historic deleveraging, structural demand for Bitcoin and Ethereum remains intact. ETF inflows and stablecoin supply growth are building liquidity—what matters is how quickly that turns into new risk-taking.”

Traders are watching external catalysts, including Trump’s tariff rhetoric and Powell’s upcoming comments. Nick Ruck of LVRG Research said, “Rate cuts are on the table, but tariff fears are limiting upside. Bitcoin’s long-term value attracts investors, but macro headlines keep the short-term choppy.”

For now, the $110,000 level remains the key support to watch. A decisive breach could shift market sentiment from cautious to defensive, potentially shaping Bitcoin’s next major move.

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