Bitcoin May Slip Below $108,000 as U.S.–China Tensions and Rate Fears Drive Crypto Fear to ‘Extreme’

• Major catalyst: $19 billion in futures liquidations amplified selling pressure.

• Geopolitical friction and higher rate fears pushed risk appetite lower across crypto and equities.

• On-chain fundamentals remain resilient: Bitcoin is still up ~180% year-on-year with strong institutional demand.

Bitcoin price drop below $108,000: Stay informed on support levels, market drivers, and what traders should watch next. Read our update from COINOTAG.

What is causing the Bitcoin price drop?

Bitcoin price drop is primarily driven by a surge in leveraged liquidations in the futures market combined with rising macroeconomic and geopolitical risk. These forced sales coincided with heightened U.S.–China trade rhetoric and renewed rate-sensitivity, pushing sentiment into the “extreme fear” zone.

How did futures liquidations and U.S.–China tensions influence the move?

Last week, more than $19 billion of leveraged crypto positions were liquidated, producing a cascading sell-off. Traders reported rapid declines in long positions that reduced liquidity and widened price swings. Simultaneously, elevated U.S.–China trade rhetoric and concerns about higher interest rates increased risk aversion among institutional and retail buyers. The Crypto Fear & Greed Index registered readings in the low-to-high 20s (22–28), consistent with extreme fear and reduced buying conviction.

Rising U.S.–China tensions, higher rates, and market risks hit Bitcoin, with the Crypto Fear & Greed Index at 22, signaling extreme fear.

Bitcoin is once again under pressure, slipping under the critical $108,000 support and erasing billions in market value. The cryptocurrency fell to $107,477 earlier this week, prompting traders to reassess short-term risk management and stop-loss placement.

Many market participants describe the current phase as Bitcoin “flirting with danger,” as it tests technical support levels that will determine whether the recent pullback remains a correction or expands into a deeper decline.

Why the sudden drop

A major factor behind the decline is a wave of liquidations in the crypto futures market. Last week, over $19 billion worth of leveraged positions were wiped out, forcing rapid deleveraging and margin selling that magnified price declines across the market. Ether, Solana, and XRP also felt the impact as correlated flows accelerated the downturn.

At the same time, global economic tensions weighed on risk assets. Rising U.S.–China trade rhetoric, renewed fears of higher interest rates, and warnings of a possible global correction reduced investors’ willingness to hold highly levered positions.

“The escalation of U.S.-China trade rhetoric poses a substantial downside risk to risk assets, including Bitcoin,” Farzam Ehsani, Co-Founder and CEO of VALR, told The CryptoTimes. “Historically, Q4 has been a favorable season for the crypto market, but this time around, the market is contending with a highly complex backdrop where geopolitical uncertainty and global trade dynamics could easily override seasonal tailwinds.”

As high-risk assets, cryptocurrencies typically amplify macro shifts. Market indicators and sentiment gauges now point toward caution: the Crypto Fear & Greed Index shows readings consistent with extreme fear, prompting tighter risk management among traders.

Key levels to watch

For traders, $108,000 is the immediate make-or-break support. Holding above this level could stabilize prices and attract buyers. A slide below $104,000 would likely trigger further selling. On the upside, reclaiming and sustaining a move above $112,000 would help restore confidence and invite renewed buying interest.

At the time of writing, Bitcoin was trading at $108,890 with a 24-hour trading volume of $86.39 billion and a market cap of $2.16 trillion.

Bitcoin Price Chart: Source- TradingView

Despite near-term fear, some long-term investors view the dip as a potential accumulation window. Bitcoin remains up roughly 180% year-on-year, supported by limited supply dynamics, ongoing institutional allocations, and sustained global demand. These fundamentals argue for longer-term resilience even amid short-term volatility.

“While the Fed Chair’s remark suggests that the tightening cycle may be nearing its end, economic data dependency remains high,” Ehsani added. “A prolonged U.S. government shutdown could delay critical inflation and employment data, complicating the Federal Reserve’s next monetary policy and rate decisions, which further adds uncertainty to the liquidity outlook.”

Over the next several days, market reaction to macro releases and liquidity conditions will determine whether this pullback is transient or the start of a deeper corrective phase.

Also Read: Crypto Market Slumps Amid Global Trade Fears

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TAGGED:Price Analysis

Frequently Asked Questions

Will Bitcoin fall below $104,000 in the next week?

Short-term moves depend on liquidity and macro headlines. If selling momentum persists and liquidity thins, a test of $104,000 is possible; however, strong bids from long-term holders and institutional participants could limit downside. Traders should use stop-losses and manage position sizes accordingly.

How long will Bitcoin stay in “extreme fear”?

Sentiment cycles vary. Extreme fear can last days to weeks depending on macro developments and liquidity. If macro indicators stabilize and liquidations ease, sentiment often improves quickly. If uncertainty deepens, the index can stay depressed longer.

Key Takeaways

• Liquidations amplified the move: Over $19 billion in futures liquidations intensified the pullback and increased volatility.
• Macro and geopolitical risk matter: U.S.–China tensions and rate concerns reduced appetite for risk assets, including Bitcoin.
• Long-term fundamentals remain intact: Scarcity, institutional demand, and year-on-year gains support a watchful buy-the-dip narrative for long-term investors.

Conclusion

The current Bitcoin price drop combines technical pressure from massive futures liquidations with a risk-off macro environment driven by U.S.–China tensions and rate sensitivity. Short-term traders should monitor the $108,000 and $104,000 levels, while long-term investors may view the correction as a measured buying opportunity if fundamentals remain steady. Published: October 17, 2025. Updated: October 17, 2025. Author: COINOTAG.