Bitcoin extended declines on Wednesday, failing to sustain gains above the key $100,000 level, as escalating U.S.-China trade tensions kept investor sentiment cautious.

Bitcoin was around 1% weaker at $98,536.0 as of 08:47 ET (13:47 GMT). 

Bitcoin fails to hold gains as US-China trade tensions weigh

The cryptocurrency briefly surpassed the $100,000 mark in the past two days but failed to maintain those gains amid escalating U.S.-China trade tensions.

The recent trade friction began when the U.S. imposed a 10% tariff on Chinese imports, citing national security concerns. 

In response, China announced retaliatory tariffs on U.S. goods, including liquefied natural gas, coal, crude oil, and farm equipment. 

Additionally, Beijing initiated an antitrust investigation into Alphabet (NASDAQ:GOOGL) Inc.'s Google.

These developments have heightened investor caution, leading to increased market volatility. Gold prices, for instance, reached a record high as investors sought safe-haven assets amid the uncertainty.

Bitcoin's inability to sustain levels above $100,000 reflects the broader risk-off sentiment.

Trump administration moves to ease crypto regulations - NYT

The U.S. Securities and Exchange Commission (SEC) is downsizing its crypto enforcement unit, reassigning lawyers to other departments, as part of the Trump administration’s broader effort to reduce cryptocurrency regulations, the New York Times (NYSE:NYT) reported citing sources familiar with the matter.

The SEC's potential regulatory easing could have provided a bullish impetus for Bitcoin. However, the prevailing macroeconomic concerns, particularly the intensifying trade dispute between the world's two largest economies, overshadowed this development.

The impact of the crypto unit's downsizing on ongoing enforcement actions remains uncertain, the report stated.