Bitcoin retreats below $108,000 as geopolitical tensions between the US and China fuel uncertainty

Bitcoin (BTC) slipped below the $108,000 level on Tuesday as traders reacted to renewed global uncertainty, particularly the ongoing trade tensions between the United States and China.

According to The Block’s crypto price tracker, Bitcoin dropped 2.6% in the past 24 hours to $107,854 as of early Tuesday. The world’s leading cryptocurrency had briefly bounced back above $111,200 on Monday after a three-day decline, but selling pressure soon returned as traders turned cautious.

Market analysts expect volatility to continue in the near term.

“We believe that macroeconomic concerns are driving daily price swings,” said Jeff Mei, Chief Operating Officer at BTSE. “As long as trade tensions between the U.S. and China persist, market volatility is likely to remain high.”

He added that the latest pullback was mostly driven by traders reducing risk ahead of the planned meeting between Chinese President Xi Jinping and U.S. President Donald Trump, scheduled for later this month in South Korea.

“While there’s a possibility of progress at the meeting, it’s unlikely that all trade tensions will disappear completely,” Mei noted.

The uncertainty also weighed on other major cryptocurrencies. Ethereum (ETH) dropped 4.77% to $3,855, BNB fell 5.36%, and Solana (SOL) declined 4.26% over the same period.

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Spot crypto ETFs also saw outflows on Monday. Bitcoin ETFs reported about $40.5 million in net outflows, while Ethereum ETFs saw $145.7 million withdrawn, according to SoSoValue data. This follows last week’s second-largest weekly outflow on record—over $1.23 billion.

Investor sentiment has turned cautious, with The Block’s Fear and Greed Index now at 29, reflecting growing fear in the market.

“The biggest risk right now is unpredictability,” Mei explained. “Markets can move sharply based on a single headline or even a tweet. The best investors can do is stay diversified and manage their risk.”

Traders are now closely watching Friday’s U.S. Consumer Price Index (CPI) report—a key indicator of inflation that could influence the Federal Reserve’s next rate decision.

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According to CME Group’s FedWatch Tool, there is a 98.9% chance that the Fed will cut interest rates by 25 basis points at its upcoming meeting.