Bitcoin Price Climbs to $87.5K as Trump's Tariff Delay Fuels Market Rally This Year

Bitcoin price demonstrated significant volatility during recent trading sessions as investors digested conflicting signals from U.S. policy announcements and shifting macroeconomic conditions. The world’s largest cryptocurrency started the week hovering around $88,000 before oscillating sharply in response to multiple catalysts, eventually settling near $87.56K at the time of writing with a 24-hour trading volume of $1.15 billion.

Price Swings Reflect Trader Reaction to Geopolitical Shifts

The dramatic intraday fluctuations underscored how sensitive cryptocurrency markets remain to geopolitical developments. Bitcoin price movements this year have consistently demonstrated their correlation with broader risk sentiment, as traders repositioned ahead of key policy announcements. The cryptocurrency initially climbed above $90,000 during early morning trading before retracing when traditional markets opened, only to surge higher again as positive headlines emerged. This pattern of repeated advances and pullbacks highlighted the tension between bullish fundamentals and underlying market uncertainty.

Trump’s Tariff Delay Ignites Market-Wide Risk Appetite

The catalyst for renewed bullish momentum came from the World Economic Forum in Davos, where U.S. President Donald Trump announced a postponement of previously scheduled trade tariffs set for February 1st. Following what Trump characterized as productive discussions with NATO Secretary General Mark Rutte, the president outlined a preliminary framework addressing cooperation over Greenland and Arctic region initiatives. The potential accord prompted Trump to withdraw the tariff threat, signaling a more collaborative approach to international trade negotiations.

Markets responded enthusiastically to the de-escalation. Risk assets across the board—including equities, emerging market currencies, and digital assets—received a boost. The S&P 500, Nasdaq, and Dow Jones Industrial Average each climbed approximately 1.5% on the day, providing tailwinds for bitcoin price gains. Notably, Trump reiterated his administration’s supportive stance on digital assets during the same forum, expressing intent to sign comprehensive cryptocurrency market structure legislation imminently. His statement about congressional work on crypto frameworks specifically targeting bitcoin and other digital currencies reinforced the bullish sentiment permeating financial markets.

Technical Outlook: Key Levels Define Bitcoin Price Direction This Year

Technical analysts highlighted several important price zones that will determine bitcoin price trajectory in the near term. Following last week’s break above the $90,000 level—where BTC rallied to nearly $98,000 before settling around $93,600—the medium-term bias remains constructive. Bulls maintaining control would require a recapture of the $94,000 level and a retest of the $98,000 resistance. A decisive break above these intermediate zones could propel bitcoin price toward $103,500 and subsequently toward the formidable $106,000–$109,000 resistance band.

Key support anchors the market at $91,400. Should this level surrender, traders would likely redirect focus toward deeper pullback targets near $87,000 or $84,000. The $103,500–$109,000 resistance region is expected to present the most challenging obstacle for sustained rallies. Rejection at these levels could reverse sentiment decisively, potentially triggering declines toward sub-$80,000 prices and undermining the current constructive technical structure.

Global Bond Stress Tests Market Resilience

Beneath the surface optimism, macroeconomic headwinds threaten to constrain the upside for risk assets including bitcoin. Japan’s bond market has emerged as a particular pressure point, with the nation’s 10-year government bond yield climbing to approximately 2.29%—a level unseen since 1999. This escalation reflects mounting concerns about Japan’s fiscal sustainability, particularly given government debt exceeding 240% of gross domestic product, with debt servicing projected to consume roughly one-quarter of fiscal expenditures by 2026.

Such structural concerns in major bond markets could transmit volatility to cryptocurrency markets if risk-off sentiment re-emerges. Capital flows between traditional fixed income and digital assets would likely turn negative, creating headwinds for bitcoin price advancement and potentially triggering fresh liquidations.

Derivative Traders Face Heavy Losses Amid Volatility

Wednesday’s violent price oscillations proved costly for leveraged traders operating in cryptocurrency derivatives markets. According to CoinGlass data tracking on-chain positions, over $1 billion in crypto positions faced liquidation within the preceding 24-hour period as prices whipsawed in both directions. Long positions bore disproportionate losses, accounting for approximately $672 million in forced closures, while short positions contributed roughly $335 million.

Bitcoin led the destruction with approximately $426 million in liquidations, reflecting its outsized weighting in the broader crypto market. Ethereum followed with around $366 million in position closures. These cascading liquidations amplified price volatility, creating a self-reinforcing cycle where margin calls begat forced selling, which triggered additional stop-loss cascades.

Current Market State and Key Metrics

At present, bitcoin price trades at $87.56K with a 24-hour high of $88.86K and low of $86.10K, reflecting the continued tension between supportive policy signals and underlying macroeconomic risks. The total market capitalization stands at $1.75 trillion, reflecting the steady accumulation of value within the cryptocurrency ecosystem despite cyclical volatility. The combination of geopolitical risk management, supportive political rhetoric, and technical positioning suggests bitcoin price this year will continue navigating between these competing forces—with policy developments and macro data proving decisive in determining whether digital assets can establish new record highs or face renewed consolidation.