Bitcoin Price Plunges to $96K as US-Canada Trade War Sparks Crypto Market Jitters

Bitcoin (BTC) extended its recent downturn on Sunday, tumbling to $96,821 as escalating trade tensions between the US and Canada rattled financial markets.

Bitcoin price hit a 14-day low of $96,821 on Sunday, Feb 2, as markets weigh hawkish macroeconomic signals. Amid the market dip, key BTC on-chain indicators are hinting at an early rebound as the month unfolds.

Bitcoin (BTC) extended its recent downturn on Sunday, tumbling to $96,821 as escalating trade tensions between the US and Canada rattled financial markets. The cryptocurrency has been in a steady decline since former President Donald Trump’s inauguration, despite initial optimism around his crypto-friendly stance and the wave of institutional interest driven by ETF applications.

After rallying past $105,000 in response to the Federal Reserve’s decision to pause interest rate hikes, Bitcoin’s bullish momentum has stalled amid mounting economic uncertainty.

The latest shock came as the White House and the Canadian government clashed over new tariffs, igniting fears of a prolonged trade dispute between two of the world’s largest economies. President Trump announced tariffs on key Canadian exports, citing unfair trade practices, while Prime Minister Justin Trudeau vowed to retaliate with countermeasures.

The fallout from the trade war sent ripples through global markets, with Bitcoin leading the crypto sell-off. BTC price dipped 3.3% over the last 24 hours wiping out over $600 million from its total market capitalization, exacerbating investor anxiety.

While some investors had pinned hopes on Trump’s administration fostering a more favorable regulatory climate for digital assets, the broader risk-off sentiment appears to have outweighed these expectations—at least for now.

Bitcoin price chart showing a bullish pennant formation as BTC price recovers from $96K lows. Source: TradingView

Bitcoin Price Sell-off May Be Nearing Completion as On-Chain Data Hints at Early Rebound

Despite Bitcoin’s sharp decline, on-chain data suggests that long-term holders remain unfazed by the recent volatility. Many market participants believe that the US-Canada trade war, while disruptive, does not significantly impact Bitcoin’s core fundamentals. Others speculate that if the dispute escalates, it could drive governments and institutions toward Bitcoin as a hedge against fiat instability.

One of the key indicators supporting this outlook is the Bitcoin Age Consumed metric, which tracks the movement of older BTC holdings. According to data from blockchain analytics firm Santiment, Bitcoin’s Age Consumed figure currently stands at 4.4 million—marking a 96% decline from its January 22 peak. That peak coincided with profit-taking by short-term traders following Trump’s inauguration-fueled crypto surge, which briefly drove Bitcoin above $106,000.

At press time on February 2, BTC price has dropped roughly 10% from those highs, yet the sharp decline in Age Consumed suggests that long-term investors are largely sitting tight rather than exiting their positions. Historically, subdued selling pressure from this cohort has preceded market recoveries, as it signals confidence in Bitcoin’s long-term trajectory.

If long-term holders continue to resist the sell-off, Bitcoin could be poised for an early rebound as market conditions stabilize. Moreover, should the US-Canada trade conflict intensify, demand for BTC as a global reserve asset may surge, potentially fueling a fresh wave of institutional and sovereign adoption. While short-term traders remain jittery, the conviction among Bitcoin’s strongest hands could be the key to setting the stage for a renewed rally in the coming weeks.

Bitcoin Price Forecast: Bulls Mount Support at $96,000 as Long-term investors Hold Steady

The Bitcoin price forecast chart below shows BTC trading at $98,500 after dipping to a 14-day low of $96,821, showing signs of potential stabilization. The Donchian Channel indicates Bitcoin remains within a key consolidation zone, with $94,346 as a lower boundary support and $109,588 as the upper range. A rebound from $96K could signal a short-term recovery if bulls manage to reclaim $101,967, the mid-range level.

Momentum indicators suggest a mixed outlook. The Elder’s Force Index (EWO) remains slightly positive at 2.42, hinting that buying pressure still lingers despite recent sell-offs. However, the MACD histogram has flipped red, with the MACD line crossing below the signal line—typically a bearish signal. This suggests momentum is weakening, which could expose Bitcoin to further downside risks.

If BTC breaks below $96K, a continuation of the 10% drawdown could lead to deeper losses toward $94K or lower. However, holding above this key level and reclaiming $101K could reinforce bullish confidence, potentially setting up a retest of the $105K psychological barrier.

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