Bitcoin price staged a significant recovery, rebounding above $106,000 after plummeting over 6% to a low of $103,659 on Friday, driven by renewed U.S.-China trade tensions. The catalyst for the rebound was U.S. President Donald Trump's confirmation that high tariffs on China will not remain, signaling a de-escalation in trade disputes.
Trump clarified in an interview with Fox News on October 17 that proposed 100% tariffs on Chinese goods "won't stand" and are unsustainable, adding that he expects to meet with China's President Xi Jinping in two weeks. He stated, "I think we'll be fine with China," marking a stark reversal from his earlier threats that had sparked market panic. This shift cooled fears in both stock and crypto markets, with the S&P 500 erasing losses in a V-shape recovery.
The initial crash was attributed to miner selloffs, spot ETF liquidations, and broader concerns over U.S. credit, bank loan losses, and a government shutdown, which drove investors toward Treasurys and gold (which hit a new all-time high of $4,340 per ounce). The Crypto Market Fear & Greed Index plummeted from 64 (greed) to 22 (extreme fear) in just one week, reflecting heightened anxiety. However, after Trump's comments, Bitcoin price jumped to $105,224, though it remained over 5% down at the time of reporting, with trading volume surging 56% in 24 hours.
Derivatives data showed mixed reactions, with Bitcoin futures open interest (OI) down over 3% in 24 hours but rising on Binance by 1.18% in the last hour. Experts warned of ongoing risks, including crypto options expiry and macro events like CPI releases, amid the prolonged government shutdown.
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