Cryptocurrency markets have experienced a revival following a record $19 billion liquidation, boosted by signs of a transient ceasefire in the US-China trade war.
Bitcoin (BTC) briefly bounced above a two-week high of $116,400 on Monday, fueled by investor expectations for two significant macroeconomic catalysts this week: the Federal Open Market Committee’s (FOMC) upcoming interest rate decision on Wednesday and a potential U.S.-China trade deal that could take place on Thursday.
Cryptocurrency investor sentiment improved from “fearful” to “neutral” territory on Monday after reports emerged that the United States and China had reached a “preliminary” framework for an import tariff deal.
The rebound comes days before U.S. President Donald Trump and Chinese President Xi Jinping are scheduled to meet on Thursday to discuss trade negotiations aimed at averting further escalation between the world’s two largest economies.
“Recent optimism around U.S.-China trade negotiations helped spark Bitcoin’s weekend rally. Signs of progress have lifted broader risk sentiment,” Wenny Cai, co-founder and chief operating officer of cryptocurrency trading platform SynFutures, told Cointelegraph.
Related: $19 Billion Crypto Crash Opens Door to $200,000 in Bitcoin. dollars in 2025: Redefining finance
The United States and China “will exit the agreement,” President Trump said
Trump added that adding to growing investor appetite is optimism that the two nations will “reach an agreement” after Thursday’s meeting, according to a statement he made aboard Air Force One on CNBC on Monday. reported.
Signs of de-escalation helped Bitcoin recover above its short-term holder (STH) cost base of around $114,000 for the first time since Trump’s renewed tariff threats sent the $19 billion cryptocurrency market crashing in early October.
Recovering to this level is crucial for Bitcoin’s recovery as the STH cohort is more sensitive to short-term price fluctuations. Bitcoin’s sustained momentum below this level often results in significant selling pressure from these holders.
Related: JPMorgan reportedly plans to allow customers to borrow in exchange for Bitcoin and Ether
On October 10, President Trump said he would impose a 100% tariff on Chinese imports effective November 1 unless a trade agreement is reached.
“[…] “beginning on November 1, 2025 (or earlier, depending on further actions or changes by China), the United States of America will impose a 100% tariff on China, in excess of any tariff it currently pays,” Trump wrote in the October 10 issue of Truth Social. post.
The weekend after Trump’s announcement, cryptocurrency markets experienced a record $19 billion liquidation, sending Bitcoin briefly falling to $104,000 by October 17 the following week.
Wednesday’s upcoming interest rate decision is also fueling greater demand for risky assets, including cryptocurrencies. Markets are currently pricing in a 96.7% chance that the Federal Reserve will cut interest rates by 25 basis points, According to to CME Group’s FedWatch tool.
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