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Bitcoin's price experienced significant volatility on February 4, briefly reclaiming the $100,000 mark after U.S. President Donald Trump announced a pause on tariff threats against Canada and Mexico. However, this upward momentum was short-lived as China swiftly retaliated with new tariffs on U.S. products, including a 15% tariff on coal and liquefied natural gas, as well as a 10% tariff on crude oil, agricultural machinery, and specific vehicles. This development reignited trade war concerns, causing Bitcoin’s price to retreat to $98,000.
Key Levels to Watch as Bitcoin Reacts to Market Uncertainty
Bitcoin has been testing critical support levels after its recent peak above $108,000 last month. On February 3, the price dipped towards the $90,000 zone, a level that has been repeatedly tested since mid-November. This range remains a crucial area for traders who are assessing the market’s next move.
According to trader George, the current market setup presents two possible scenarios, depending on whether Bitcoin has already established a local bottom. He identified an optimal trade entry (OTE) range between $93,000 and $95,000, suggesting that if these levels hold, Bitcoin could consolidate before another potential rally later in February. However, if this support fails, traders should prepare for further downside and monitor liquidity spikes below these levels.
Fibonacci Analysis and Bullish Order Blocks
Analyst Mark Cullen highlighted that the 38.2% Fibonacci retracement level at $98,000 could serve as a critical pivot point. He noted that this level could provide a shallow retracement before a continuation of the bullish trend. Additionally, Cullen identified a "bullish order block" around the $95,000 range, which could act as another key level where late long positions might get shaken out before a potential rebound.
Meanwhile, MN Capital founder Michael van de Poppe suggested that Bitcoin could reach a new all-time high in February if it maintains support above $93,000. He emphasized that after a strong bounce, a short-term correction is expected before another upward expansion.
Bitcoin Must Hold Above $97,000 for a Sustained Rally
Bitcoin’s realized price distribution (URPD) provides insights into unspent transaction outputs (UTXOs) and potential areas of support and resistance. Key support levels include $97,500, $96,450, and $94,300, while resistance stands at $100,780 and $101,867.
The Bitcoin liquidation heatmap from CoinGlass indicates a significant bid liquidity wall just above $97,000. This suggests that Bitcoin may retest this support level in the short term, providing a liquidity grab before potential further upside.
Conclusion
Bitcoin remains at a critical juncture, with traders closely monitoring whether it can hold above key support levels. If Bitcoin maintains its footing above $97,000, bullish momentum may resume, potentially leading to new all-time highs in February. However, failure to hold these levels could result in a deeper correction toward the $90,000 region. Investors should remain cautious and watch these crucial technical indicators as the market navigates ongoing macroeconomic uncertainty.