Bitcoin Stalls Despite US–China Trade Truce

Although tensions between the US and China have eased after months of escalation, Bitcoin failed to capitalize on the positive news. Over the past week, the world’s largest cryptocurrency slipped 1.72%, while Ethereum and Solana dropped 2.55% and 4.76%, respectively.

Key Highlights:

• US–China Trade Agreement:
  China agreed to three major US demands:

  • A one-year delay in rare earth export restrictions.

  • The resumption of US soybean imports.

  • The US reduced tariffs on Chinese goods from 57% to 47%.
    → The deal helped ease geopolitical tensions and boosted traditional markets.

• Traditional Markets Respond Positively:

  • Gold prices fell back to around $3,990/oz, returning to pre-conflict levels.

  • The Nasdaq 100 Index rose 2.7% from its October 10 low, fueled by improved trade outlooks and strong corporate earnings.

• Bitcoin Remains Under Pressure:

  • BTC currently trades near $110,000, down 9.4% since October 10.

  • On-chain analysts attribute the weakness to a $19 billion leverage wipeout following the early-October crash, which drained momentum from the rally.

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Fed’s Warning Overshadows the Truce

• On October 29, the Federal Reserve cut interest rates by 0.25 percentage points and announced it would end Quantitative Tightening (QT) on December 1—a move typically bullish for risk assets.

• However, Chair Jerome Powell unsettled markets by hinting that the Fed might not cut rates in December, sparking confusion.
  → The probability of a December rate cut (per CME FedWatch) plunged from 91.5% to 55%, triggering a 2% drop in Bitcoin’s price.

• Several Fed officials have since voiced support for Powell’s cautious stance, reinforcing the likelihood of a rate hold next month.

Outlook Ahead

• While the US–China truce eased geopolitical tensions, the Fed’s unclear monetary path has introduced a new wave of uncertainty.

• The Altcoin Season Index dropped to 41, its lowest since mid-August, reflecting heightened caution in the crypto market.

This Week: All Eyes on US Economic Data

Investors are now focusing on key US employment and inflation data to gauge the Fed’s next move:

• Tuesday: JOLTs Job Openings

• Wednesday: ADP Nonfarm Employment

• Thursday: Unemployment Claims

• Friday: Michigan Inflation Expectations Index

→ Stronger-than-expected jobs data could strengthen the case for a rate hold in December, potentially putting further pressure on Bitcoin and the broader crypto market.