Bitcoin Holds Near $111K as Traders Navigate China Trade Tensions and Market Caution

Bitcoin hovered around $111,000 Thursday afternoon Hong Kong time, maintaining stability after a period of heightened volatility, as China’s latest retaliatory trade measures against the U.S. sparked renewed risk aversion in global markets.

Analysts note that Bitcoin’s correlation with gold has reached a multi-year high of 0.9, reinforcing the “digital gold” narrative, as both assets tend to move in tandem during geopolitical shocks.

The broader cryptocurrency market remained cautious, with total market capitalization holding steady around $3.8 trillion. Major tokens traded near recent levels: Ether (ETH) around $3,940, BNB at $1,180, Solana (SOL) above $190, while DOGE outperformed with a 4% daily gain and a 21% weekly rise.

Market observers described the recent pullback as a phase of consolidation rather than panic, following last week’s record $19 billion liquidation event. On-chain analytics firm CryptoQuant noted that the decline reflected a “controlled deleveraging” rather than a broad sell-off.

Sentiment indicators point to measured caution. The FxPro fear index slipped to 34, with traders defending the $109K–$110K range, which has acted as a base since August. FxPro’s Alex Kuptsikevich commented, “The bears seem to have had their fill. Potential buyers are waiting for a clearer reason to add risk, and trade tensions aren’t that reason yet.”

On-chain metrics remain constructive. CryptoQuant’s Ki Young Ju emphasized Bitcoin’s strong correlation with gold, highlighting its growing appeal as a store of value amid macro uncertainty.

Ethereum’s ecosystem also showed long-term resilience. Developers progressed with testing the Fusaka upgrade on Sepolia, while Bhutan confirmed plans to migrate its national digital ID system from Polygon to Ethereum by early 2026, signaling institutional trust in the network’s infrastructure.

Institutional flows continue to support the market. Nassar Achkar, Chief Strategy Officer at CoinW, said, “Despite historic deleveraging, structural demand for Bitcoin and Ethereum remains firmly intact. ETF inflows and stablecoin supply growth are building liquidity—what matters now is how quickly that translates into new risk-taking.”

Traders remain alert to external catalysts, including Trump’s tariff rhetoric and upcoming Powell remarks. Nick Ruck of LVRG Research noted, “Rate cuts are on the table, but tariff fears are capping upside. Bitcoin’s long-term value is drawing back investors, but macro headlines keep the short-term choppy.”

For now, the $110,000 level is the key zone to watch. A decisive break below could shift sentiment from cautious to defensive, potentially setting the stage for the next significant move in the market.