Bitcoin rebounds on US-China trade optimism, rate cut forecasts

Bitcoin climbed on Monday, tracking a broad rebound in risk assets after the United States and China announced a framework for a trade deal aimed at preventing further escalation in their ongoing trade dispute.

Risk sentiment received an additional boost from weaker-than-expected US inflation data, which reinforced expectations that the Federal Reserve will move to cut interest rates during its upcoming policy meeting later this week.

Bitcoin jumped 3.5% to $115,504 at 01:22 a.m. Eastern Time (05:22 GMT), breaking out of the $100,000–$110,000 range that dominated most of October.

US–China trade optimism supports crypto markets

US and Chinese officials said over the weekend that they had reached a framework agreement to be expanded upon when President Donald Trump meets Chinese President Xi Jinping later this week.

The agreement covers key contentious issues such as China’s recent restrictions on rare earth exports, elevated US tariffs, and higher shipping fees between the two countries. The Trump–Xi meeting is scheduled to take place in South Korea this week.

News of progress in trade talks between the world’s two largest economies helped lift risk appetite across markets, easing bets on any immediate escalation in the trade conflict.

While cryptocurrencies are not directly impacted by trade disputes, global sentiment shifts often drive volatility in digital asset markets. Trade tensions between Washington and Beijing had kept crypto prices subdued through most of October.

Broader crypto rally and Fed rate-cut expectations

The wider crypto market also advanced Monday, extending gains that began over the weekend.

Ether — the world’s second-largest cryptocurrency — surged 7.5% to $4,240.35, while BNB rose 2.8% to $1,151.90. Solana, Cardano, and XRP gained between 1.5% and 6%.

Among memecoins, Dogecoin climbed 6.3%, and the $TRUMP token added 4.2%.

The rally followed US inflation data for September that came in slightly below expectations, strengthening investor confidence that the Federal Reserve will cut rates this week and adopt a more dovish tone on future easing.

The Fed is widely expected to reduce rates by 25 basis points at its upcoming meeting, following a similar cut in September. According to the CME FedWatch tool, markets are pricing in nearly a 100% probability of such a move.

Rate cuts boost crypto appeal

Lower interest rates are generally seen as supportive for cryptocurrencies, as they free up liquidity to flow into speculative assets. The low-rate environment was one of the key drivers behind the historic crypto bull run of 2021.

Beyond monetary policy, investors this week are also watching earnings reports from major US tech firms, which could influence overall market sentiment.

Crypto prices often move in tandem with US tech stocks, though they lagged behind them for much of October.