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Bitcoin fell on Thursday, extending its decline after last week’s flash crash as traders remained risk-averse amid renewed U.S.-China trade tensions and ongoing concerns over regulatory developments.
Bitcoin Struggles to Regain Momentum
The world’s largest cryptocurrency dropped 1.3% to $111,031 by 05:10 GMT (01:10 ET), slipping after attempts to stabilize above the $115,000 level. Despite the weakness, Bitcoin remains well above last week’s lows near $103,000, supported by some optimism around potential U.S. interest rate cuts.
The recent turbulence followed a record $16 billion liquidation of leveraged long positions last week — the largest single-day wipeout in crypto history. The sharp drop, sparked by fears of an escalating U.S.-China trade war, erased over $500 billion in total crypto market capitalization within days.
Market sentiment has yet to fully recover. The Crypto Fear & Greed Index sank into “fear” territory, signaling persistent caution and reluctance to rebuild long positions.
Trade Tensions Continue to Weigh on Sentiment
Bitcoin’s weakness has closely mirrored broader risk assets as geopolitical tensions linger. U.S. President Donald Trump’s threat to impose 100% tariffs on Chinese imports reignited fears of another trade confrontation.
Beijing vowed to “fight to the end” if a new trade war emerges, while Washington officials hinted at diversifying supply chains away from China, further unsettling investors.
These developments have pressured risk-sensitive assets, including cryptocurrencies, as investors pivot toward traditional safe havens such as gold, which continues to post fresh record highs.
Regulatory Shock: DOJ Seizes $15 Billion in Bitcoin
In a major regulatory development, the U.S. Department of Justice (DOJ) announced it had seized 127,271 Bitcoin—worth roughly $15 billion—from a Cambodia-based “pig butchering” scam, marking the largest crypto forfeiture in DOJ history.
Prosecutors charged Chen Zhi, chairman of Prince Holding Group, with wire fraud and money laundering, alleging he oversaw a “criminal empire built on forced labor and deception.” The seized Bitcoin will reportedly be moved into a newly created U.S. strategic Bitcoin reserve, following an executive order from President Trump earlier this year.
The massive seizure stirred unease across crypto markets, raising fears of further government crackdowns and potential liquidations from state-held Bitcoin.
Altcoins Extend Declines
Broader crypto markets mirrored Bitcoin’s downturn, with most major altcoins trading lower:
- Ethereum (ETH) fell 2.8% to $3,996.47, slipping below the key $4,000 level.
- XRP dropped 3.7%, while BNB edged 1.3% lower.
- Solana (SOL) and Cardano (ADA) declined 5.8% and 4.4%, respectively.
- Among meme tokens, Dogecoin shed 4.2%, while $TRUMP fell 3.5%.
Outlook
Analysts note that while lower U.S. interest rate expectations could provide near-term support, the combination of trade uncertainty, regulatory action, and market liquidation fatigue continues to suppress momentum.
Until confidence returns and volatility subsides, crypto markets are likely to remain defensive — with Bitcoin consolidating below $115,000 and traders avoiding aggressive positioning ahead of further geopolitical and regulatory headlines.
