Bitcoin drawdown widened to 27% near FTX levels amid escalating US-China trade tensions

Bitcoin has endured its most significant drop since the collapse of FTX in late 2022, with market pressure mounting due to escalating global tariff disputes.

While markets have taken a breather after Donald Trump announced a 90-day pause on reciprocal tariffs, the pain is not necessarily over.

According to data from CryptoQuant, Bitcoin’s drawdown, a measure of how far the asset has fallen from its all-time high, widened to 27%.

Bitcoin Drawdown Since 2023. (Source: CryptoQuant)

This figure, while painful, was still modest compared to past bear markets. In 2018, Bitcoin plummeted 83% from its ATH and the 73% decline during the 2022 downturn triggered by cascading crypto failures.

Even so, the downturn took a toll on holders. CryptoQuant data shows that 25.8% of Bitcoin’s circulating supply, or roughly 5.12 million BTC, was underwater yesterday.

These coins were acquired at prices above the current market rate, leaving many investors with unrealized losses.

Bitcoin Supply in Loss (Source: CryptoQuant)

Market observers have linked the correction to the broader macroeconomic conditions, particularly the geopolitical tensions between the United States and China. The renewed trade tariff threats have rattled global financial markets, eroding investor confidence.

This uncertain environment has spilled over into the digital asset space, with Bitcoin, Ethereum, and other major cryptocurrencies having suffered steep losses over the past week.

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