From cointelegraph by Zoltan Vardai

Bitcoin price may experience a significant liquidation event if it falls under a key support level that would wipe out over $1.3 billion worth of leveraged long positions.

Bitcoin fell below the $100,000 psychological mark on Feb. 4, after market sentiment was hit byglobal trade war concerns, following new import tariffs announced by the United States and China.

To avoid a correction below $90,500 in the near term, Bitcoin needs a weekly close above the key $93,000 support level, according to Ryan Lee, chief analyst at Bitget Research. 

“Watch for Bitcoin's support at $90,500, $93,000,” the analyst told Cointelegraph, adding:

“Dropping below $90,500 might indicate bearish trends. These levels could shape market sentiment depending on how Bitcoin trades around them.”

Bitcoin risks significant downside volatility under $93,000. A potential correction below would trigger nearly $1.3 billion worth of leveraged long liquidations across all crypto exchanges, Coinglass data shows.

Escalating trade war tensions could increase economic certainty, which may push Bitcoin below $90,000 in the short term, despite Bitcoin’s status as a hedge against traditional finance volatility.

Related: Bitcoin creator Satoshi Nakamoto may be wealthier than Bill Gates

Global trade wars: a double-edged sword for Bitcoin price

While macroeconomic uncertainty is generally a red flag for risk assets, the current tensions between China and the US may be a double-edged sword for Bitcoin price.

While the prospect of new tariffs increases investor uncertainty due to their historically negative market impact, they may only pose a short-term risk for Bitcoin’s price, according to James Wo, the founder and CEO of venture capital firm DFG.

Trade war concerns may also increase the dollar’s debasement, leading to higher inflation and drive demand for US dollar alternatives, Wo told Cointelegraph, adding:

“This is what Bitcoin was originally intended for, to be a hedge against fiat devaluation and inflation which might see Bitcoin ultimately benefitting from the flight away from weakened fiat currencies to push its price higher over time."

Related: Crypto crash triggered by TradFi events, says Wintermute CEO

Trump’s meeting with Chinese President reportedly delayed

Market participants now await President Donald Trump’s upcoming discussions with Chinese President Xi Jinping, aimed at resolving trade tensions and avoiding a full-scale trade war, which may have significant implications for global markets.

Trump was scheduled to meet President Jinping on Feb. 11 next week, his top trade adviser, Peter Navarro, said during a Politico Live event on Feb. 4.

Yet hours later, two unnamed US officials said that Trump and Jinping’s Tuesday meeting would be delayed, despite Navarro’s earlier claims, according to a Feb. 4 WSJ report that cited the unknown officials.