Bitcoin Price Drops Below $112,000 Amid China Trade Risks
Background: China’s Trade Moves Trigger Risk-Off Sentiment
Bitcoin price dropped below $112,000 in early Tuesday trading after new trade measures from China intensified global risk-off sentiment. The decline followed China’s sanctioning of U.S. units of South Korean shipbuilder Hanwha Ocean, a move that reignited fears of an escalating trade conflict between China and the United States. This development came just days after both countries signaled potential restraint in their ongoing trade disputes. (Cryptonews)
Market Reaction: Stocks and Crypto See Widespread Losses
The repercussions from China’s announcement spread rapidly across global markets. Asian stocks saw significant declines, with Japan’s Nikkei index dropping over 3%—its worst session in nearly two months. Meanwhile, futures tied to major U.S. and European indices fell, with S&P 500 contracts down 0.7% and Nasdaq 100 futures losing 1%. Investors sought safety as the yen strengthened against the U.S. dollar, and 10-year U.S. Treasury yields slipped to roughly 4.03%.
Crypto markets experienced high volatility, tracking the broader risk aversion. Bitcoin price fell by 3% to $111,869, while Ethereum decreased by 4% to around $4,000. Binance Coin (BNB) shed more than 10% after strong performance last week. Other major cryptocurrencies, including XRP, Solana, and Dogecoin, recorded 5–6% declines over the previous 24 hours. Overall market liquidations reached $630 million, with long positions accounting for roughly two-thirds of this wipe-out, according to data from CoinGlass.
Volatility Intensifies as Macro Risks Persist
The current correction extends a bout of volatility that began last week when U.S. President Donald Trump threatened 100% tariffs on Chinese imports. That announcement triggered the crypto market’s largest-ever liquidation event, with almost $19 billion in trader capital erased across derivatives exchanges within 24 hours (Hyperliquid data). While there was a brief rebound over the weekend, the renewed sell-off highlights how closely the Bitcoin price remains linked to global economic conditions and trade risks.
Gold and silver, often considered safe havens, initially saw gains but reversed into losses during heavy afternoon selling. Analysts note the continuing sensitivity of digital assets to global macro drivers, with crypto’s correlation to broader financial markets remaining high. The near-complete reversal of the earlier Bitcoin price bounce underscores the fragility and interconnectedness of risk assets in the current environment.
What’s Next for Crypto Markets?
With the Bitcoin price testing new lows, traders are watching for further developments in U.S.-China trade relations and the resulting impact on investor sentiment. The close alignment between crypto markets and traditional assets underlines the importance of global macroeconomic events for cryptocurrency valuations. Further escalation or de-escalation in trade disputes could determine the market’s next direction.
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