Bitcoin Markets Stall Despite Positive Inflation Data Amid US-China Tensions
Despite positive inflation data, Bitcoin and the wider crypto market experienced a consolidation near recent all-time highs, analysis suggests. This is attributed primarily to ongoing trade friction, specifically the US increasing tariffs on Chinese goods.
- Impact of Tariffs: US-China trade deal involves a significant tariff increase to 55%, outweighing positive inflation data for market sentiment.
- Market Consolidation: Bitcoin paused its rally below the $112,000 mark, testing crucial support levels including the $100,000 threshold.
- Order Book Resilience: Heavy Ask liquidity remains stacked up to $120,000, showing a bull market structure despite shorter-term consolidation.
- Critical Support: Avoiding pullbacks below the $100,000 level is key to validating the resistance-to-support reversal at that price.
- 2025 Yearly Open: $XX,XXX has been identified by analysts as a crucial psychological floor and potential structural support for future bear markets.
Analysis: Trade Deal Terms Influence Market Sentiment
This price consolidation follows the positive surprises in inflation data earlier this week. However, according to trading resources Material Indicators, the specific details of the perceived “deal” — a move from the current 30% tariff to a “total of 55% tariffs” — appears to be dominating trader focus.
“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,” shared Keith Alan, co-founder of Material Indicators. He further remarked:
“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.”
Bullish Order Book Structure Persists
Analysis of order book liquidity points to persistent buying interest from $111,000 up to $120,000. Material Indicators highlights this as a crucial element for the Bitcoin bull case.
“TLDR: When in doubt, zoom out,” suggested Alan, alongside data. “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.”
Despite this short-term consolidation and prominent bid/ask imbalances, Alan doesn’t anticipate an imminent collapse, stating:
“Support tests are healthy. … Support at the 2025 Yearly Open is my line in the sand.”
$100,000 Designated as Critical Psychological and Structural Support
Analysts previously identified $100,000 as a key psychological barrier. Now, during the current consolidation phase below the ATH, its status as support has emerged. Alan emphasizes the importance of holding this level in tests.
All Eyes on $100K and $120K
As Bitcoin consolidates below its recent record, key support levels are paramount. The immediate focus is on holding the $100,000 threshold. The longer-term integrity and relevance of the 2025 Yearly Open (potentially $57,000 – ~$59,000 range, adjustment needed) may also re-evaluate over time. Maintaining support around $120,000 remains crucial for bulls aiming to clear resistance levels.
Note: This analysis does not constitute investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research.
