The Bitcoin price has experienced a notable decline of 6% from its all-time highs, leading to significant liquidation events that approached $200 million on Friday, while sparking renewed speculation about the cryptocurrency’s future trajectory.
Analysts from The Bull Theory attribute the current slump to geopolitical developments, specifically President Donald Trump’s announcement of substantial tariffs and export controls on Chinese goods, particularly affecting key industrial and strategic materials.
How Tariff Risks Are Impacting The Bitcoin Price
The implications of these tariffs, according to the analysts, are multifaceted, introducing risks that could disrupt supply chains, accelerate inflation, and slow global trade.
Several factors are contributing to Bitcoin’s sell-off at this time. First, there is a notable risk rotation occurring, with investors seeking refuge in safer assets such as cash and gold.
Second, the looming tariff risks could lead to rising inflation, potentially delaying anticipated rate cuts. Third, the unwinding of short leverage positions is impacting alternative cryptocurrencies and leveraged Bitcoin holdings, exacerbating the downward trend.
Lastly, the uncertainty surrounding trade policies has created an “uncertainty premium,” prompting markets to demand a discount until a clearer picture emerges.
Drawing parallels to past market behavior, the analysts recall that threats of tariffs in 2025 precipitated a significant crash in the Bitcoin price and other cryptocurrencies. These recent moves appear to serve as liquidity probes, testing the market’s resilience and flushing out weaker hands before a potential recovery phase.
Analysts Predict Positive Outlook For BTC
Looking ahead, The Bull Theory suggests market participants should be vigilant about BTC’s nearest key support zone, particularly around the $116,000 mark, where buyers have historically returned.
Additionally, they assert that the reaction of policymakers will be crucial; if the Federal Reserve (Fed) signals a willingness to ease monetary policy, a sharp rebound could follow. Conversely, if Trump’s rhetoric regarding tariffs diminishes or becomes more defined, it is expected that confidence in the market may be restored.
In the short term, analysts anticipate continued downside volatility with potential retests of support levels. However, the medium-term outlook suggests that savvy investors may begin accumulating Bitcoin as the prevailing narrative weakens.
Long-term, with anticipated rate cuts and the historically strong performance of markets in the fourth quarter, the prospects for the Bitcoin price appear promising. As liquidity returns and market momentum builds, the path forward for Bitcoin often trends upward.
BTC At $130,000 By Month-End?
Market expert Timothy Peterson has also weighed in, noting that half of Bitcoin’s gains for October may have already been realized, according to artificial intelligence (AI) simulations.
The analysis presented earlier this week a 50% chance that the Bitcoin price will finish the month above $140,000, and a 43% probability it would end below $136,000.
However, following the recent Bitcoin price drop, the updated AI forecast suggests an expected month-end value of around $130,000, representing an 11% increase from the current price of approximately $117,300.
Despite this, there is now an 18% chance that ‘Uptober’ could conclude negatively, adding another layer of uncertainty to the market’s outlook.
