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Bitcoin is up about 4% within the last 24 hours and was trading at around $110,000. Short-term investors are watching a break above $112,200 as an indication of renewed strength, while long-term investors are still largely in profit.
An easing of tensions between the US and China could reportedly make assets like Bitcoin more dangerous within the short term, adding a geopolitical layer to cost movements.
Macro risks could shape the following downturn
According to analyst Willy Woo, the following crypto bear market might be driven by a classic “business cycle” dip somewhat than the standard crypto rhythms.
He identified that to date two cycles have overlapped: the four-year Bitcoin halving rhythm and fluctuations within the M2 money supply.
Woo warned that an actual economic slowdown – resembling those seen in 2001 and 2008 – could be a really different test of Bitcoin's role within the markets.
We had two 4-year cycles on top of one another
Now there is barely one; global M2 liquidity
The next bear, in my view, will likely be defined by one other cycle that folks forget → the business cycle
The last downturns within the business cycle that actually took hold were in 2008 and 2001, before the invention of crypto markets pic.twitter.com/inHqQH7zWx
– Willy Woo (@woonomic) October 20, 2025
Historical events provide a guide
The dot-com downturn around 2001 caused US stocks to fall about 50% in two years. And throughout the 2008 financial crisis, the S&P 500 fell about 56% as credit froze and GDP fell.
These events occurred before cryptocurrencies existed, which is why cryptocurrencies haven’t yet been stress-tested by a full-scale recession, in response to Woo. That concern is reportedly how liquidity would change and the way quickly investors would sell riskier holdings.
BTCUSD is trading at $107,854 on the 24-hour chart: TradingView
Liquidity and recession signals
The National Bureau of Economic Research tracks employment, personal income, industrial production and retail sales to detect recessions. There is currently no general signal that a deep downturn is imminent, although some risks are elevated.
Trade tariffs are an element that dampened growth in the primary half of 2025 and are expected to weigh on GDP into the primary half of 2026, analysts said. Such slower growth can erode liquidity and put pressure on markets.
$BTC has reclaimed the $109,000-$110,000 support zone.
The next crucial level to reclaim is $112,000, which could push Bitcoin higher.
As US-China trade tensions ease, I believe BTC could proceed to rise from here. pic.twitter.com/D8VNses1ix
— Ted (@TedPillows) October 20, 2025
What traders are watching next
Analyst Ted Pillows said Bitcoin has regained its footing between $109,000 and $110,000, pointing to $112,000 as the following key resistance.
A transparent move above this zone could attract more buyers. Conversely, a severe liquidity squeeze because of a broader recession could cause Bitcoin to maneuver more like tech stocks in previous downturns somewhat than gold.
The real test
Woo said the true test for Bitcoin will come when money runs out and investors have to make your mind up where to park their money – somewhat than through the standard crypto triggers.
This period, he said, will show who treated Bitcoin as a hedge and who treated it as a high-risk bet, and that end result will shape institutional behavior and market rules going forward.
Featured image from Gemini, chart from TradingView
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