BTC Price Analysis: Tariff Fears Weigh as Bitcoin Eyes $110K Breakout

Bitcoin Grips Onto $100K as US Tariffs Spook Markets

On Saturday, February 1, bitcoin (BTC) declined by 1.54%, following Friday’s 1.86% loss, closing at $101,041. Despite the pullback, BTC avoided sub-$100K for the fifth consecutive session.

Trump’s Tariffs Spark Fed Policy Uncertainty

On Friday, January 31, the White House announced that US President Trump would impose 25% tariffs on Canada and Mexico and the 10% on China. President Trump defended the move on X (formerly Twitter), stating:

“This was done through the International Emergency Economic Powers Act (IEEPA) because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl. We need to protect Americans, and it is my duty as President to ensure the safety of all.”

Trump linked new tariffs to his campaign pledge to curb illegal immigration and drug trafficking and how Americans voted for it. However, the US President remained silent on the reasons for 10% import duties on Chinese goods.

The new tariffs and threats of broader tariffs weighed on risk sentiment. US tariffs could raise import prices and inflation higher, potentially leading to a more hawkish Fed rate path. Higher borrowing costs may impact demand for riskier assets like BTC.

Since the tariff news, BTC has fallen from a January 31 high of $106,015 to a February 1 low of $100,701.

ETF Market Flows Enjoy Five-Week Inflow Streak

Despite the macroeconomic uncertainty, the US BTC-spot ETF market extended its inflow streak to five weeks, reflecting investor confidence in Trump’s pro-crypto stance.

According to Farside Investors, US BTC-spot ETF flows for the week ending January 31 were as follows:

• iShares Bitcoin Trust (IBIT) reported net inflows of $750.9 million.
• Grayscale Bitcoin Mini Trust had net inflows of $110.8 million.
• However, ARK 21Shares Bitcoin ETF (ARKB), Bitwise Bitcoin ETF (BITB), and Fidelity Wise Origin Bitcoin Fund (FBTC) had combined net outflows totaling $180.5 million.

The US BTC-spot ETF market saw $559.5 million of total net inflows in the week, down from $1,757.7 million the previous week. Concerns about a potentially more hawkish Fed rate path tempered demand. Despite the late January slowdown, the US BTC-spot ETF market registered total net inflows of $5,158.7 million in January, the fourth largest since launch.

Blackrock’s (BLK) IBIT remains the dominant force in the US BTC-spot ETF market, now the second largest BTC holder (excluding exchanges). According to HODL15Capital, IBIT holds 582,821 BTC, topping the ETF table. Fidelity’s FBTC is a distant second, holding 213,634 BTC.

ETF Store President Nate Geraci remarked on the US BTC-spot ETF market’s performance, saying:

“I can still remember a year ago, when I was told there was no demand for spot btc ETFs… After they had meaningful inflows, then it was all ‘degen retail’. One year later, they post a $5+bil inflow month. Love to see it.”

Strategic Bitcoin Reserve Gains Political Support

Expectations for a US Strategic Bitcoin Reserve (SBR) supported BTC’s price. On February 1, Senate Banking Subcommittee on Digital Assets Chair Cynthia Lummis commented:

“The Strategic Bitcoin Reserve is the only tool I see that can help people in my generation right the wrongs that we did to younger generations and generations to follow with respect to our debt and fiscal mismanagement.”

Senator Lummis also shared an interview, discussing the potential impacts of an SBR and the Bitcoin Act. The Bitcoin Act proposes the US government acquire one million BTC over five years, with a mandatory 20-year holding period. If implemented, a US SBR could tighten BTC supply, fueling a rise to unprecedented highs.

US Congress, the Fed, the US Treasury Secretary, and the President must approve national strategic reserve assets.

BTC Price Outlook: Record Highs in Sight?

BTC’s price trends depend on Trump’s policies, the Fed rate path, SBR developments, and US BTC-spot ETF flows.

• US BTC-spot ETF inflows and progress toward a US SBR could counter Fed policy jitters, driving BTC beyond the record high of $109,312.
• A lack of progress toward an SBR, BTC-spot ETF outflows, and a hawkish Fed could pull BTC toward $95k.

Dive deeper into the influence of macroeconomic data, US crypto policies, and BTC-spot ETF market flows on price action. Follow our analysis and forecasts here to manage crypto-related risks.

Technical Analysis

Bitcoin Analysis

Despite the tariff-driven pullback, BTC remains above the 50-day and 200-day Exponential Moving Averages (EMA), sending bullish price signals.

A break above $105k could enable the bulls to target the all-time high of $109,312. A breakout from $109,312 may signal a move toward 120k next.

Conversely, a BTC break below $100k could signal a fall toward the 50-day EMA. A fall below the 50-day EMA may bring the $90,742 support level into sight.

With a 49.56 14-day Relative Strength Index (RSI) reading, BTC could drop to the $90,742 support level before entering oversold territory (RSI below 30).

Explore real-time BTC price data and indicators here to stay ahead of market trends.

Ethereum Analysis

ETH, still the second-largest cryptocurrency by market cap, sits below the 50-day and 200-day EMAs, following a February 1 sell-off, sending bearish price signals.

An ETH break above the 200-day EMA would support a move toward the $3,287 resistance level and the 50-day EMA. A breakout from the 50-day EMA could enable the bulls to target the $3,563 resistance level.

ETH-spot ETF flow trends remain crucial to near-term price moves.

Conversely, a drop below $3,000 could bring the $2,815 support level into play.

The 14-period Daily RSI reading, 42.81, suggests ETH could drop to the $2,816 support level before entering oversold territory. (RSI below 30).

Final Thoughts

Bitcoin’s path to $110,000 remains uncertain as traders weigh Trump’s tariffs, ETF flows, and potential Fed rate hikes. Investors should monitor macroeconomic data, crypto regulations, and BTC-spot ETF trends to navigate market volatility effectively.

Stay ahead of crypto market trends with real-time data and expert insights here.