The flagship cryptocurrency Bitcoin is showing tentative signs of strength as institutional and retail investors ramp up accumulation. However, looming regulatory headwinds—particularly the tariff threat from Donald Trump’s renewed trade confrontation with China—are raising questions about how sustainable the rally can be.
Positive signs for Bitcoin
Market-data reveal a number of constructive developments:
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After a sharp decline to around USD 107,000 in early October, Bitcoin’s open interest, ETF inflows and net trading volume in the spot market have all begun to turn more favourable.
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Professional and retail investors alike appear to be accumulating BTC in the spot market, even as futures traders remain cautious or even short.
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These dynamics suggest the market may be bottoming out and preparing for the next phase of upward movement.
Macro and regulatory headwinds
Despite the improving on-chain/investor signals, several macro and policy factors are restraining upside momentum:
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Trump’s self-imposed plan for 100% tariffs on Chinese goods (referred to as “TACO” in one tweet) has contributed to investor uncertainty.
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A prolonged U.S. government shutdown is also complicating the macro-backdrop and reducing risk appetite.
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In the short term, traders are eyeing upcoming major events such as U.S. CPI data, potential Fed rate cuts and the government reopening—any of which could introduce volatility.
Technical/flushing out risk zones
From a technical perspective:
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There is a cluster of potential liquidation zones for long positions between roughly USD 106,300 and USD 104,000. Meanwhile, short positions might face squeeze risk around USD 115,000.
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The biggest deleveraging event happened on 10 October, when large parts of the market’s leverage were flushed out—this is viewed by some analysts as a reset rather than a breakdown.
Implications and outlook
Putting together the positive and the negative, here are some key take-aways and implications:
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The accumulation suggests that a base may be forming for Bitcoin, from which a more sustainable upward trend could emerge—provided macro/regulatory conditions remain favourable.
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That said, the risk environment is more complex now than in earlier cycles: trade tensions, fiscal uncertainties and monetary policy shifts all pose threats to the upside.
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For investors, it may make sense to adopt a balanced view: if you’re bullish, recognise that the path of least resistance could still be upward—but you’ll want risk-controls in place in case the macro narrative shifts.
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If upcoming U.S. data and policy signals break positively (for example lower inflation, or a big move towards reopening) then BTC could gain momentum from its current accumulation phase. Conversely, if trade wars flare up or fiscal gridlock persists, the pressure could intensify.
Conclusion
In summary: Bitcoin is in a somewhat awkward position. On one hand, the technical and investor fundamentals are showing promise. On the other hand, macro/regulatory headwinds—particularly the aggressive tariff posture from Trump—are a real drag. The next few weeks are likely to be important in determining whether the accumulation phase evolves into a sustained rally, or whether the risk environment forces a re-test of lower levels.
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