Bitcoin reversed some of its post-Fed decline early Thursday after a meeting between President Donald Trump and Chinese President Xi Jinping yielded a positive outcome.
The US President, speaking on board Air Force One, was also reported to have said that the agreement was for one year and would be extended. President Trump also said the rare earth issue has been resolved and there will be no further obstacles.
President Trump also said that U.S. tariffs on China would be reduced from 57% to 47%. In comments reported by Reuters, he said he would visit China in April and that Mr. Xi would visit the United States at some stage thereafter.
BTC at one point fell to $108,000, extending its overnight decline from $113,000 to $110,000 after Federal Reserve Chairman Jerome Powell downplayed the certainty of a December interest rate cut.
XRP and doge$0.1945 Inter-major losses fell by 4%. ether Ethereum$3,920.06Solana's SOL, BNB, and Cardano's ADA showed losses of as much as 3%.
Futures tied to the S&P 500 also fell, but the dollar index maintained its overnight gains and hovered around 99.00.
According to the BBC, President Trump left South Korea without announcing the results of his meeting with President Xi. “They shook hands at the end of the meeting before departing,” the BBC reported.
The bar for expectations was set high after President Trump said earlier this week that the two countries were close to a trade deal. Trade tensions escalated recently after President Trump threatened to impose 100% tariffs on Chinese goods in response to Beijing's decision to tighten its control over rare earth exports.
Earlier, the US central bank's Federal Open Market Committee lowered its benchmark overnight borrowing rate to a range of 3.75-4%. The Fed added that it would end tapering its asset purchases, known as quantitative tightening, on Dec. 1.
These twin policies squarely change the position of crypto’s wheelhouse. Low benchmark interest rates of 3.75-4% indicate that financial conditions are starting to ease after two years of restraint, with real yields softening and supporting risk appetite.
Bitcoin and other non-yielding assets tend to benefit as liquidity returns and investors shift away from cash-heavy positions toward growth and alternative stores of value.
The end of balance sheet outflows on December 1st will effectively reintroduce net liquidity into the system, easing pressure on banks and increasing market depth across risk assets. Such an environment may encourage risk-taking behavior among crypto traders and renew leverage in derivatives markets.
But the bigger variable remains geopolitics. If the US-China trade deal is finalized and tariffs are further lowered, global risk sentiment will increase and the Fed's dovish tone will increase, potentially sending Bitcoin back above $115,000. But if talks break down, investors could exit new longs as dollar prices and volatility soar again.
Thus, accommodative monetary policy and easing trade tensions form an unusual combination that will support the crypto market through November, but optimism remains as to whether this “soft landing” narrative will hold up once liquidity actually returns.
