Bitcoin breaks $80,000, Xi Jinping's Taiwan warning threatens even the last support line at $78,000?

▲ Trump, Xi Jinping, and Bitcoin/ChatGPT generated image ©

As Bitcoin (BTC) sharply dropped, giving up the $80,000 support level, inflation shock exceeding expectations and a sharp war of nerves between the US and Chinese leaders over Taiwan are rapidly freezing global investment sentiment.

According to investment media FXStreet on May 14 (local time), Bitcoin (BTC) fell by 2.3% to $79,200 during Asian trading hours, breaking the $80,000 floor that had been maintained for the past week. This was an immediate reaction from the risky asset market after Chinese President Xi Jinping issued a direct warning during the Beijing summit with US President Donald Trump, stating, "The Taiwan issue is the most important matter in China-US relations, and if mishandled, the two countries could clash or fall into a dangerous situation." In response, Taiwan's Ministry of Foreign Affairs countered that Beijing is the sole threat to regional peace, and these geopolitical tensions accelerated downward pressure on the virtual asset market.

Economic indicators also acted as a negative factor. Following the Consumer Price Index (CPI) announced last Tuesday, which hit 3.8%, a three-year high, the Producer Price Index (PPI) announced on Wednesday also surged by 1.4% month-over-month, nearly tripling market expectations of 0.5%. The successive inflation shocks dampened expectations for interest rate cuts by the Federal Reserve (Fed) and led to the disappearance of the structural positive factor of liquidity easing, which the virtual asset market had previously priced in.

In the altcoin market, Solana (SOL) led the decline, plummeting 5.6% to $90. Ethereum fell 2.1% to $2,250, showing the second-lowest weekly return, and XRP (Ripple) also traded down 1.7% at $1.43, failing to escape weakness. In contrast, Dogecoin rose 0.9% to $0.1126, showing unique strength as the only major coin to maintain an upward trend.

Volatility across financial markets also increased. Asian stock markets fluctuated due to the fallout from the US-China summit, and mainland Chinese stocks fell by 1.3%. However, not all assets collapsed. Cisco Systems surged 20% after announcing strong earnings forecasts, and artificial intelligence (AI)-related tech stocks maintained robust buying momentum, showing a differentiated trend amidst the overall mixed market.

The future direction of Bitcoin depends on whether it can hold the $78,000 support level, which was its low point in early May. Experts warn that if this level breaks, further corrections could occur, potentially reaching the sharp decline zone of last April. Conversely, if the $78,000 level is defended, structural buying forces are expected to protect the market and look for rebound opportunities before the final outcome of the US-China summit and the next macro data release.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*