Trade negotiations between the United States and China, sometimes referred to as the "trade war," have a significant impact on global financial markets, including, of course, the cryptocurrency market.
The question is how do these negotiations affect traders' profits?
*First/ optimism drives upward movement:
: When there is positive news about the progress of negotiations or reaching a trade agreement between the two countries, global markets often feel optimistic. This optimism drives investors to seek riskier assets (such as stocks and cryptocurrencies) for higher returns. In this case, the prices of digital currencies like Bitcoin and Ethereum can rise, increasing the profits of traders who own them.
*Second/ tensions drive volatility:
On the contrary, if trade tensions escalate, negotiations fail, or new tariffs are imposed, this creates a state of uncertainty in the markets. In this case, some investors may turn to digital currencies as a safe haven, which could raise their prices. However, at other times, investors may view them as high-risk assets and dispose of them, leading to lower prices. This volatility increases the risks for traders.
* The impact of the dollar:
Trade relations affect the strength of the US dollar. If the dollar weakens due to trade tensions, investors may be more inclined to seek alternatives like digital currencies, which could push their prices up. Conversely, if the dollar strengthens.
In summary:
Cryptocurrency traders should closely follow news of trade negotiations between the United States and China. This news can be a strong indicator of market trends and directly affect profit or loss opportunities in their trades. Volatility is the fundamental characteristic, and a good understanding of global events helps make better trading decisions.
