Bitcoin Holds Near $111K as Traders Weigh China Retaliation, Risk Appetite Cools
Bitcoin hovered around $111,000 during Thursday’s Asia session as traders assessed China’s latest trade measures and the possibility of U.S. tariff escalation. The market’s restrained tone reflected a broader pullback in risk appetite across digital assets, with investors showing caution amid rising geopolitical uncertainty.
Despite the narrow trading range, on-chain metrics and fund flows remain broadly supportive, suggesting underlying strength in demand. Interestingly, Bitcoin’s correlation with gold has reached multi-year highs, reinforcing its safe-haven appeal during periods of global tension. This growing alignment with traditional defensive assets highlights how crypto markets are adapting to shifting macro and policy dynamics.
Market snapshot
Bitcoin traded around $111,000 during Hong Kong afternoon hours, with majors mixed and total crypto market capitalization hovering near ~$3.8T after recent volatility. Analysts characterize the setback as controlled deleveraging rather than panic, following last week’s outsized liquidations.
Drivers: China U.S. trade tensions back in focus
Fresh Chinese export-control signals on critical inputs and the prospect of higher U.S. tariffs have reignited macro jitters. Officials on both sides have traded warnings, keeping risk assets choppy while traders look to upcoming remarks from U.S. policymakers for cues.
Correlations and positioning
Elevated BTC–gold correlation (recently ~0.85 and approaching 0.9 at peaks) underscores hedging behavior during geopolitical stress. While derivatives market share slipped in September, total open interest set fresh highs a sign that larger players remain engaged despite thinner spot/derivatives volumes.
Ethereum developments and sovereign adoption notes
Ethereum developers pushed the “Fusaka” test phase on Sepolia, progressing toward a future mainnet activation. Separately, Bhutan aims to anchor its national digital ID on Ethereum by early 2026 a notable vote of confidence in Ethereum’s infrastructure from a sovereign program. Cointelegraph+3Cointelegraph+3CoinDesk+3
Flows and sentiment
Institutional demand via ETFs and stablecoin growth continues to provide a base, though near-term risk appetite is subdued. Recent research shows September’s combined spot and derivatives volumes fell ~17.5% to $8.12T, even as open interest climbed to a record, indicating sidelined but ready capital.
Levels to watch: bitcoin holds near 111k
The $109k–$110k zone has acted as a support shelf since August. Bulls want to hold above that area to keep the bias neutral-to-constructive; a decisive break could shift tone from cautious to defensive.
Context & Analysis
Analysis: Elevated BTC–gold correlation typically appears in stress regimes, but it can fade quickly once policy paths clarify. Near-term, trade headlines and rate expectations dominate. Medium-term, structural demand (ETFs, on-chain accumulation, sovereign and enterprise use cases such as Bhutan’s ID) supports a constructive backdrop, provided key supports hold and funding/leverage remain contained.
Conclusion
With Bitcoin holding near $111,000, markets remain defensive but not distressed. Traders are watching the $109,000–$110,000 support zone, as a decisive break below could trigger a deeper correction. The cautious tone reflects uncertainty over global trade tensions and potential shifts in U.S. policy.
However, any easing in tariff rhetoric or fresh policy support could quickly reignite risk appetite across crypto markets. Investors are also eyeing Ethereum’s upcoming upgrade milestones and broader macro catalysts for the next major directional move, as digital assets balance between caution and optimism in a volatile global backdrop.
FAQs
Q : Why did Bitcoin stabilize today?
A : Traders are digesting China–U.S. trade headlines; positioning and open interest remain elevated even as spot and derivatives volumes cooled.
Q : How high is BTC’s correlation with gold now?
A : Recent readings are around ~0.85 and have neared 0.9 at peaks, marking a multi-year high.
Q : What is the key support zone?
A : $109k–$110k has acted as a base since August; losing it could turn sentiment defensive.
Q : What’s happening with Ethereum’s upgrades?
A : Developers advanced the “Fusaka” phase on Sepolia as part of the roadmap toward a mainnet release.
Q : Is any country using Ethereum for national ID?
A : Bhutan plans to migrate its digital ID system to Ethereum by early 2026.
Q : Did trading activity slow in September?
A : Yes. Combined spot and derivatives volumes fell ~17.5% to $8.12T, though open interest hit record highs.
Q : Does Bitcoin holding near 111k mean a bull trend is intact?
A : Not necessarily; it indicates near-term stabilization. The trend direction depends on macro headlines and whether key support holds.
Facts
Event
BTC steady near $111k as traders weigh China retaliation; risk appetite coolsDate/Time
2025-10-16T14:00:00+05:00Entities
Bitcoin (BTC); Gold; Ethereum; People’s Republic of China; United States; CryptoQuant; Bhutan (Govt.); Sepolia testnetFigures
BTC ≈ $111,000; Total crypto mkt cap ≈ $3.8T; BTC–gold correlation ~0.85–0.9; Sept volume $8.12T; OI peak ~$230B. CoinDesk+3CoinDesk+3The Block+3Quotes
“Decline was not a panic sell-off but a controlled deleveraging.” CryptoQuant note (via CoinDesk). “Potential buyers are waiting for a clearer reason to add risk.” — Alex Kuptsikevich, FxPro (via CoinDesk). CoinDeskSources
CoinDesk market wrap; Al Jazeera/FT/Guardian on China–U.S. trade; Cointelegraph on Ethereum testing; Yahoo Finance on Bhutan ID; CCData/Coindesk Research on volumes. data.coindesk.com+6CoinDesk+6Financial Times+6