Bitcoin rose about 4% in the past 24 hours, trading at nearly $110,000. While short-term investors are eyeing a break above $112,200 for signs of new strength, long-term holders are still largely profiting.
Reports have revealed that easing tensions between the US and China could support risk assets like Bitcoin in the short term, adding a geopolitical layer to price movements.
Macro risks could shape the next economic downturn
According to analyst Willy Wu, the next crypto bear market could be caused by a typical “business cycle” downturn rather than the usual crypto rhythm.
He pointed out that so far, two cycles have overlapped: Bitcoin’s four-year halving rhythm and M2 money supply fluctuations.
Wu warned that a true contraction in the business cycle, like the one seen from around 2001 to 2008, would be a different test of Bitcoin’s role in the market.
Two 4y cycles superimposed
Now there is only one. Global M2 liquidity
The next bearish IMO will be defined by another cycle that people have forgotten → economic cycle.
The last economic cycle downturns that really took hold were in 2008 and 2001, before the cryptocurrency market was invented. pic.twitter.com/inHqQH7zWx
— Willy Woo (@woonomic) October 20, 2025
Historical events provide guidance
The dot-com market downturn around 2001 caused U.S. stocks to drop about 50% in two years. And during the 2008 financial crisis, the S&P 500 index fell by about 56% as credit froze and GDP fell.
These events happened before cryptocurrencies existed, which is why Wu says cryptocurrencies have yet to undergo the stress test of a full-blown recession. The concern, according to reports, is how liquidity will change and how quickly investors will sell risky holdings.
BTCUSD 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 identify recessions. While there are currently no overarching signs that a deep recession is imminent, some risks are rising.
Trade tariffs are expected to be one of the drags on growth in the first half of 2025 and weigh on GDP into the first half of 2026, analysts said. Such a slowdown in growth could drain liquidity and put pressure on the market.
$BTC It has regained the $109,000 to $110,000 support zone.
The next important level to recover is $112,000, which could allow Bitcoin to move higher.
I think BTC could rise further from here as the US-China trade tensions ease. pic.twitter.com/D8VNses1ix
— Ted (@TedPillows) October 20, 2025
What traders are looking for next
Analyst Ted Pillows said Bitcoin has regained footing between $109,000 and $110,000, citing $112,000 as the next key resistance level.
A clear move above that zone could invite more buyers. Conversely, a sharp liquidity squeeze due to a broader economic downturn could force Bitcoin to behave more like tech stocks during past downturns than gold.
real test
Wu said the real test for Bitcoin will come when money is tight and investors need to choose where to park their money, rather than from the usual cryptocurrency triggers.
He said this period will reveal who treated Bitcoin as a hedge and who treated it as a high-risk bet, and the results will shape future institutional actions and market rules.
Featured images from Gemini, charts from TradingView
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