The cryptocurrency market is showing signs of stabilization after a turbulent period that saw over $19 billion in liquidations, fueled this time by optimism around a possible truce in the US-China tariff conflict.
Bitcoin (BTC) climbed back above $116,000 on Monday, reaching its highest level in two weeks. The rebound came as investors turned their attention to two major events on the horizon — the Federal Reserve’s interest rate announcement on Wednesday and a potential trade agreement between Washington and Beijing later this week.
Reports of a “preliminary” tariff framework between the two countries helped ease investor anxiety, lifting crypto sentiment from “fear” back to “neutral” territory.
The news comes ahead of Thursday’s highly anticipated meeting between US President Donald Trump and Chinese President Xi Jinping, where the two leaders are expected to discuss ways to de-escalate the ongoing trade dispute.
“Renewed optimism surrounding the US-China talks sparked a weekend rally in Bitcoin. Any progress on the negotiation front tends to improve overall risk appetite,” said Wenny Cai, co-founder and COO of SynFutures.
Trump confident a deal will be made
Speaking aboard Air Force One on Monday, President Trump said he believes the US and China will “come away with the deal,” according to CNBC.
This easing of tensions gave Bitcoin the momentum to reclaim its short-term holder (STH) cost basis — around $114,000 — for the first time since early October, when Trump’s tariff threats triggered a sharp market correction.
Crossing this threshold is seen as a key short-term bullish signal. Historically, when BTC trades below the STH cost basis, newer investors tend to sell at a loss, adding to downward pressure.
On Oct. 10, Trump warned that the US would impose a 100% tariff on Chinese imports starting Nov. 1 if no agreement was reached. His post on Truth Social stated that the move could come “earlier depending on China’s response.”
The announcement sent shockwaves through global markets and led to one of the largest crypto liquidations on record, briefly pushing Bitcoin’s price down to $104,000 by Oct. 17.
Now, with the market regaining its footing, traders are also keeping a close eye on the Federal Reserve’s next move. The CME FedWatch Tool shows a 96.7% probability that the Fed will announce a 25-basis-point rate cut this week — a decision that could inject fresh confidence into risk assets like Bitcoin.
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