Bitcoin’s rebound above $78,000 offers bulls a lifeline, but looming technical signals warn of potential further downside.Rising U.S.-China tensions and yuan devaluation add volatility, tying Bitcoin’s fragile recovery to geopolitical uncertainties.
Bitcoin is clawing its way back, climbing toward 80,000 after a gut-wrenching drop to a five-month low of 74,000. That recovery comes just one day after chaotic scenes unfolded across global markets, triggered by mixed signals from the White House on trade. Some calm seems to have returned, but investors aren’t exhaling just yet.
As of today, Bitcoin hovers above the 78,000 mark, which is not just any number. That level happens to be its 50-week moving average — a line traders watch closely. Holding above this line can be seen as a lifeline for Bitcoin bulls, marking the difference between a healthy correction and a full-blown downturn.
Still, the road ahead looks steep. The daily chart is painting a grim picture. Bitcoin is trading beneath a descending trendline stretching back to early January. The so-called “death cross” — when the 50-day moving average drops below the 200-day — is in play, a technical cue that tends to spook traders.
Momentum or Mirage?
Bitcoin’s bounce is unfolding in the shadows of renewed U.S.-China trade tensions. President Donald Trump is turning up the pressure on Beijing, warning of an extra 50% tariff hike if China hits back. In response, the People’s Bank of China has allowed the yuan to dip beyond the red-line level of 7.20 per U.S. dollar — something it hasn’t done since Trump took office.
Letting the yuan weaken like this could make Chinese exports cheaper, potentially offsetting some of the blow from tariffs. Interestingly, such currency moves have been tied to Bitcoin rallies in the past. In 2015, a sudden 1.9% yuan devaluation caused Bitcoin to dive briefly before exploding 60% over the next four months.
A weaker yuan typically signals a favorable environment for Bitcoin, according to Ben Zhou, CEO and founder of Bybit. That said, Beijing’s growing hostility toward crypto makes it trickier now for Chinese investors to flock to Bitcoin the way they once did.
A Fragile Recovery Tied to Geopolitics
Today’s uptick in Bitcoin coincides with broader improvements in global markets. The Nikkei, which plunged 8% yesterday, bounced back with a 6% gain. European equities and U.S. futures are also moving higher, thanks to hopes that some kind of trade deal might be back on the table.
Scott Bessant, U.S. Secretary of Trade, is leading negotiations in Japan, and his presence is injecting a dose of optimism into otherwise jittery markets. But nothing is locked in, and the threat of escalation still looms large. Trump isn’t exactly softening his stance, and China has vowed to push back “to the end.”
Back in the Bitcoin world, traders are watching the 78,000 to 80,000 range like hawks. Holding that zone could open the door to retesting the 200-day average at 86,700 — a move that might light a fire toward 90,000. But failure to defend support might invite sellers to drive it toward 70,000, a level not seen this year.
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