Bitcoin Price Rallies Above $88K on Trump's Tariff Delay, Strong USD Headwind Persists

The bitcoin price experienced significant volatility in recent trading as geopolitical developments shifted market sentiment. Following announcements from U.S. President Donald Trump regarding trade policy changes, the cryptocurrency surged in the $88,000-$90,000 range before consolidating. At the time of this analysis, bitcoin price was trading around $88,720 with a 24-hour trading volume of approximately $971.98 million, maintaining a market capitalization of $1.772 trillion. The USD strength and macro concerns continue to create headwinds despite the policy-driven relief rally.

Political Catalyst Fuels Bitcoin Price Momentum

Trump’s statement at the World Economic Forum in Davos proved pivotal for risk assets. The U.S. President announced a postponement of planned trade tariffs scheduled for February 1, crediting what he called “very productive” discussions with NATO Secretary General Mark Rutte. This decision triggered a broad market bounce, with equities responding sharply—the S&P 500, Nasdaq, and Dow Jones Industrial Average each rose approximately 1.5% as risk sentiment improved across the board.

Cryptocurrency markets capitalized on this sentiment shift, with bitcoin price rebounding alongside traditional risk assets. The relief extended beyond mere tariff delays. During his Davos remarks, Trump reiterated strong support for the digital asset ecosystem, signaling his intent to sign comprehensive crypto market structure legislation in the near term. “Congress is working very hard on crypto market structure legislation,” he stated, pledging to unlock “new pathways for Americans to reach financial freedom.” This endorsement bolstered bullish positioning throughout the day.

Bitcoin USD Technical Positioning and Price Targets

Technical analysts point to specific resistance and support zones that will dictate near-term bitcoin price direction. According to Bitcoin Magazine analysis, the cryptocurrency maintained a bullish structure above the $90,000 level last week, rallying to $98,000 before settling around $93,600. The current bitcoin price at $88,720 suggests consolidation, with bulls targeting a reclaim of $94,000 and potential retest of $98,000.

Breaking above the $98,000 resistance could propel bitcoin price into the $103,500 zone, with ultimate resistance identified between $106,000–$109,000. Should this strong resistance zone be breached decisively, USD-denominated targets could extend even higher. Conversely, immediate support sits at $91,400 in USD terms, with deeper pullback risk toward $87,000 or $84,000 if this level fails.

Crypto Trader Losses Mount Amid Price Whipsaw

Recent volatility extracted significant costs from leveraged trading positions. CoinGlass data reveals that over $1 billion in crypto futures positions were liquidated within 24 hours as prices whipsawed across multiple levels. Long positions absorbed the majority of damage at approximately $672 million liquidated, compared to $335 million in short liquidations.

Bitcoin led the liquidation losses with roughly $426 million, while Ethereum followed at approximately $366 million. The violent price action underscores the dangers of excessive leverage in a market subject to macro-driven swings.

Macro Uncertainty: Japan’s Debt Crisis Shadow

Despite the positive policy developments, macroeconomic crosscurrents threaten to cap upside for bitcoin price and risk assets broadly. Japan’s 10-year government bond yield has climbed to approximately 2.29%—a level unseen since 1999. This spike reflects mounting fiscal pressures in the world’s third-largest economy.

QCP Capital highlighted a critical concern: Japan’s government debt exceeds 240% of GDP, with debt servicing costs projected to consume roughly one-quarter of fiscal revenues by 2026. Such structural imbalances could trigger capital rotation away from emerging assets, creating headwind pressure on bitcoin price and other cryptocurrencies. The situation exemplifies how central bank policy uncertainty can weigh on alternative assets despite near-term supportive political developments.

Market Outlook: Bitcoin Price at a Crossroads

The bitcoin price reflects competing forces. On one hand, Trump’s tariff delay and explicit crypto support provide near-term bullish catalysts. On the other hand, Japan’s fiscal stress and broader macro volatility inject uncertainty into the uptrend. The $91,400 support level and the $103,500-$109,000 resistance zone will prove critical in determining whether the current rally extends or reverses.

For traders and investors, the bitcoin price environment demands vigilance regarding leverage and position sizing given the USD-driven volatility and macro risks lurking in the background.