Key points:

Bitcoin needs to avoid wicks below $100,000 as markets grapple with the US-China trade deal.

New analysis from Keith Alan, co-founder of trading resource Material Indicators, also puts the 2025 yearly open as a “line in the sand” for Bitcoin bulls.

Bitcoin analyst: 55% tariff “isn’t going to feel good”

Bitcoin continues to consolidate immediately below all-time highs as crypto and risk-asset traders evaluate the implications of the US-China trade deal.

After initially rallying, Bitcoin pulled back as it emerged that the deal involved tariffs of 55% on Chinese imports, an even higher rate than at present.

For Alan, this is a clear potential driver of short-term BTC price action, more so than the Consumer Price Index (CPI) inflation report released on Wednesday.

“Despite having a relatively positive economic report, and news that we almost have a trade deal with China, TradFi and Crypto Markets were slightly down on Wednesday,” he summarized on X.

“I'm speculating that people aren't thrilled with the fact that U.S. tariffs on Chinese goods jumped to 55% from the 30% that was set for the negotiating period. 55% is going to be felt throughout every aspect of the U.S. economy and it isn't going to feel good.”

Reviewing order book liquidity, Alan suggested that the overall picture remained conducive to the Bitcoin bull case.

“TLDR: When in doubt, zoom out,” another X post summarized alongside data from one of Material Indicators’ proprietary trading tools. 

“A 1 year view of order book and order flow data in FireCharts shows heavy concentrations of BTC ask liquidity stacked from $111k up to $120k and disproportionately less bid liquidity below it.”

Alan said that he did not expect the “bottom to drop out” and leave sellers in control of the market despite the relative lack of bids.

“Support tests are healthy,” he concluded. 

“Support at the 2025 Yearly Open is my line in the sand.”

All eyes on $100,000 strength

As Cointelegraph reported, other key support levels have crystallized during Bitcoin’s consolidation phase below its current $112,000 record.

Chief among these is the $100,000 mark, now popular as a psychological boundary with implications for sentiment should it fail to hold.

Alan now sees its status remaining important in the long term, even during the next bear market.

“As I stated back in December when Bitcoin first started flirting with $100k, it will be important to see some consolidation above $100k with no wicks below to validate the R/S Flip,” he commented, referring to $100,000 being turned from resistance to support. 

“More importantly, this will build some structural support that could come into focus during the next bear market.”