China Retaliates, Triggering a Dead Cat Bounce in Crypto

Technology

China Retaliates, Triggering a Dead Cat Bounce in Crypto – Crypto News

Published

2 months ago

April 8, 2025

Dripp

The crypto market rose modestly on Tuesday, a sign that investors were buying the dip following the recent crash. Bitcoin price rose to $79,000, up from this week’s low of $74,500. Other tokens like Ripple and Ethereum rose, with the market cap of all coins hitting $2.5 trillion. This XRP, ETH, and BTC price prediction explores why they rose despite China’s retaliation and why this could be a dead cat bounce.

China to Retaliate on US Tariffs as Trade War Escalates

The main headline in the stock and crypto markets this week is Donald Trump’s trade war, which escalated following his Liberation Day speech last week. In that speech, he placed a 34% tariff on most Chinese imports to the US.

Beijing retaliated on Friday by placing a 34% tariff on US goods, a move that could decimate the agricultural and energy sectors. In a statement on Monday, Trump threatened that he would impose a 50% tariff if China went ahead with its retaliation. And on Tuesday, Beijing warned that it would fight to the end, risking a fully blown trade war between the two biggest economies.

Investors have largely ignored the escalatory tone from these countries. BTC price is within touching distance to $80,000, while ETH and XRP have jumped by 4.5% and 5.15% in the last 24 hours. Similarly, futures tied to the Dow Jones and Nasdaq 100 indices rose by 700 and 200 points.

Still, the ongoing crypto market rally could be a dead cat bounce, a situation where a falling asset has a relief rally and then resumes the downtrend. This bounce, also known as a bull trap, often catches traders who rush to time the market.

Bitcoin Price Prediction: Still in a Downtrend

The weekly chart reveals that the Bitcoin price crashed to a low of $74,600 on Monday as the crypto market crashed. While the price has stabilized, and while the long-term uptrend is intact, it is too early to call a bottom. That’s because the coin remains below the 25-week moving average, a sign that shorts are intact. Also, the coin remains slightly lower than the Woodie pivot point.

Therefore, by remaining below these levels, it means that the BTC price may come under pressure and lose the key support at $73,427, the upper side of the giant cup and handle pattern shown in red. The short-term bearish Bitcoin forecast will remain as long as it is below the 25 EMA, while more gains will be confirmed if it rises above $95,000.

BTC Price Chart

ETH Price Technical Analysis: At Risk of Falling to $1,000

The most likely Ethereum price forecast is where the coin resumes the downtrend and retests the support at $1,000. This case is based on the fact that it remains below $2,140, the lower side of the triple-top chart pattern. The coin has also moved lower than the 61.8% Fibonacci Retracement level and the 50-week moving average. That is a sign that it may drop to $1,000 first, followed by the key support at $886, the lowest level in 2022.

XRP Price Technical Analysis: H&S Pattern Clouds Outlook

The Ripple price’s main risk is that it formed a head and shoulders pattern on the 1D chart. It now sits at the neckline of this pattern, while a death cross pattern has formed. This pattern happened when the 50-day and 200-day WMA crossed each other on Monday.

Therefore, the most likely XRP coin forecast is bearish, with the initial target being the 61.8% retracement point at $1.57, followed by the psychological level at $1.

Frequently Asked Questions (FAQs)

Technicals suggest that the ongoing BTC price rebound is a dead cat bounce, where an asset in a downslope makes a temporary rebound.

Technicals suggest that the price of XRP and ETH will continue falling in the next few days. XRP has formed a head and shoulders, while ETH has created a triple-top.

These coins rebounded as investors bought the dip since these coins were much lower in the past few days.