If geopolitics helped Bitcoin lift its head, the issue of a US–Europe trade war has driven the cryptocurrency to its knees. Investors were reminded of last April, when the White House's imposition of the largest tariffs since the 1930s launched the "sell America" market narrative. Risk assets, including digital ones, suffered. If Donald Trump intends to make the US the crypto capital of the world, trade conflicts do not bode well for BTC/USD.

The Iran and Venezuela stories and the division of the world into West and East accelerated dedollarization and allowed Bitcoin to attempt to break out of the mid?term consolidation range of 85,000–95,000. On January 13, crypto?focused ETFs posted inflows of $760 million, the largest since October. A large portion — $351 million — went into a specialized ETF from Fidelity. Bitcoin bulls argued that continued inflows of that size could push BTC/USD back above 100,000.

Capital flows into bitcoin ETFs

However, Donald Trump's tariff move against European countries — 10% from February 1, rising to 25% in June — turned everything upside down. In April 2025, the cryptocurrency was hit hard by the White House's broad import duties. It then began to recover with US stock indices, thanks to the TACO trade — "Trump Always Backs Down." In October, Bitcoin reached a new record above 126,000, but the white streak for BTC/USD bulls soon went black.

Falling volatility, ETF outflows and a crash in crypto?treasury stocks forced investors to lock in profits while holders began moving new tokens out of old wallets. Fortunately, the 85,000–95,000 range held and stopped the BTC/USD bears. A crypto winter could have returned.

Jefferies believes such a pessimistic scenario is plausible. The firm reduced its allocation to digital assets by 10%, citing security concerns — arguing that advances in AI and related quantum computing could make storing bitcoin and other sector assets in crypto wallets extremely unsafe. BTC/USD bears have gained a new argument, so a resumption of the downtrend could be on the horizon.

Thus, the deterioration in risk appetite due to higher odds of a US–Europe trade war, along with security concerns, tripped up Bitcoin. ETF inflows can very quickly turn into outflows, since investors often react to prices rather than drive them.

Technically, the daily chart for BTC/USD shows conditions for the "spike?and?shelf" pattern to transform into a "fakeout?and?dump." For that to occur, prices must fall below the midpoint of the consolidation channel. A break of support at 90,400 would provide a basis for selling.