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See our full XRP forecast here.
Bitcoin Drops Below $95,000 as US-China Trade Tensions Resurface
XRP’s losses coincided with bitcoin (BTC) pulling back from the May 2 high of $97,997. Uncertainty surrounding US-China trade talks weighed on risk sentiment, leaving BTC below the crucial $95,000 mark for the first time in four sessions.
Reports of President Trump dismissing plans to speak with China’s President Xi Jinping sank hopes for an end to the US-China trade war. Trump reportedly stated:
“China is ‘ripping us off’ and Chinese and US officials are talking about ‘different things’.”
Risk-off sentiment spilled into broader markets. On May 5, US Futures opened in negative territory, with the Nasdaq 100 down 143 points, while gold rose 0.81% to $3,266 in early trade.
Despite trade uncertainties, BTC’s losses were relatively modest. US BTC-spot ETF net inflows from the week ending May 2 bolstered BTC price support. According to Farside Investors, the US BTC-spot ETF market logged total net inflows of $1,805.1 million.
BTC Price Outlook: Policy and Legislation in Focus
BTC fell 1.67% on May 4, adding to Saturday’s 0.98% loss to close at $94,387.
Near-term price action will likely reflect developments in US-China trade relations, Fed guidance, and ETF flow trends.
Key drivers for BTC’s near-term direction include:
- Bearish Scenario: Rising US-China trade tensions, a hawkish Fed stance, US recession concerns, resistance to the Bitcoin Act, and renewed ETF outflows. Bearish sentiment could send BTC below $90,000.
- Bullish Scenario: De-escalation in the US-China trade war, a dovish Fed outlook, strong US data, pro-crypto legislation, and sustained ETF inflows. Bullish sentiment could drive BTC above $100,000.
Legislative developments may play a pivotal role. The Bitcoin Act’s progress on Capitol Hill could be crucial for BTC’s supply-demand outlook. Senator Cynthia Lummis reintroduced the Bitcoin Act, proposing the US acquire one million BTC over five years with a 20-year holding period, potentially a major demand catalyst.
However, Governor Katie Hobbs of Arizona recently vetoed the state’s Bitcoin reserve bill, raising doubts over bipartisan backing for national crypto strategies.
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