Trade war cools down! Trump's tariff panic fades, helping Bitcoin rebound above $110,000, analysts are bullish on $120,000.

After the meeting between U.S. President Trump and Chinese President Xi Jinping, global market tensions eased as both sides reached a one-year trade agreement on rare earth and critical minerals. This favourable information quickly calmed investors' fears over the “Trump tariffs,” prompting Bitcoin prices to achieve a V-shaped rebound from a low point, returning above $110,000. Although there has been a net outflow of funds in spot Bitcoin and Ethereum ETF, analysts generally believe that as tariff concerns fade, Bitcoin is expected to challenge the key psychological level of $120,000 again in November.

Trump's Tariff Panic Eases: China and the US Reach Trade Agreement on Rare Earths and Key Minerals

After the recent concerns in the market triggered by Canadian tariffs, U.S. President Trump’s trip to Asia has become a stabilizing factor for the global market, also bringing a much-needed rebound to the cryptocurrency market. Following his meeting with Chinese President Xi Jinping, Trump announced that the U.S. and China have signed a one-year trade agreement on rare earths and critical minerals, with both sides agreeing to negotiate the agreement annually.

Key trade developments ease global tensions

The meeting lasted nearly two hours, and the main trade developments included:

• Tariff Reduction: Tariffs related to fentanyl are immediately lowered to 10%, and the overall tariffs on Chinese goods from the U.S. are reduced from 57% to 47%.
• Chip restrictions eased: The United States has relaxed chip export restrictions on companies like Nvidia.
• Geopolitical Cooperation: The two countries agreed to cooperate on surrounding geopolitical issues such as the Russia-Ukraine conflict, while Russian President Putin's envoy also stated that the conflict is expected to end within a year.

These developments effectively reduce the uncertainty of the global macroeconomy, causing investor sentiment to shift from a risk-averse mode to risk assets.

Favourable Information from Macro Drivers: Bitcoin and Altcoin Market Rebound

After Trump announced a milestone trade agreement with China, the price of Bitcoin quickly rebounded in a V shape from below $118,000, returning to the psychological level of $110,000.

• Market Rally: The broader cryptocurrency market has also rebounded, with mainstream altcoins such as Ethereum, XRP, BNB, Solana, Dogecoin, and Cardano all rising over 1% within just one hour.
• Short-term volatility and support: The current Bitcoin price hovers around $110,250, and although there has been a 2% decline in the past 24 hours, the formation of its intraday low ($107,957) and high ($113,642) indicates significant market volatility, but the favourable information from the macro side provides crucial support.

It is worth noting that despite the price rebound, trading volume over the past 24 hours has remained almost flat, with only a 2% increase. The market generally believes that the Bitcoin transfer event by SpaceX and the hawkish comments from Federal Reserve Chairman Powell have suppressed traders' active participation in the market in the short term.

ETF Capital Outflows and Future Price Predictions

While Bitcoin is experiencing a rebound, the US spot Bitcoin ETF and Ethereum ETF have seen net outflows of funds, adding a layer of complexity to the market outlook:

Despite the outflow of funds from the ETF, which indicates some short-term profit-taking and lingering market risk aversion, crypto analysts remain optimistic about the long-term trend of Bitcoin.

Analyst Ali Martinez predicts that, according to the Sharpe Ratio, Bitcoin tends to cycle between high-risk and low-risk periods, and the “shift to low risk now seems imminent” after reaching a high-risk area. As tensions triggered by Trump’s tariffs ease and cooperation between China and the U.S. is achieved in multiple areas, market risk aversion will further alleviate. Analysts expect that Bitcoin's price is likely to reach the $120,000 mark again in November.

Conclusion

The trade agreement reached between Trump and Chinese President Xi Jinping is undoubtedly a key catalyst for the recent V-shaped rebound in the cryptocurrency market, successfully dispelling the tariff gloom that has overshadowed the global economy. Although there has been a short-term outflow of funds from the spot ETF, reflecting the complexity of market sentiment, the positive macroeconomic shifts and analysts' bullish expectations provide new upward momentum for Bitcoin. As trade disputes cool down, the market will refocus its attention on Bitcoin's fundamentals and bull market cycle, with $120,000 becoming an important observation target for the next step.

Disclaimer: This article is for news information only and does not constitute any investment advice. The cryptocurrency market is highly volatile, and investors should make decisions cautiously.