#USChinaTradeTalks

The trade negotiations between the United States and China, with a new round ongoing in London, are a key catalyst for global markets, including cryptocurrencies. The uncertainty related to tariffs and trade tensions can generate volatility.

Reflections for the crypto market:

Risk and refuge: In times of instability, Bitcoin and other cryptocurrencies can be viewed as both risky assets (sold to mitigate risks) and potential safe havens. Recent Bitcoin rallies have followed positive news on agreements, suggesting that a détente may lead to bullish sentiment.

Inflation and interest rates: A trade agreement that reduces tariffs could slow inflation, leading the Federal Reserve to consider interest rate cuts, benefiting risky assets like cryptocurrencies. Conversely, an escalation could increase inflation and favor more restrictive monetary policies, penalizing the sector.

Correlation with traditional markets: Cryptocurrencies, especially altcoins, often show correlations with stock indices (e.g., Nasdaq). The U.S.-China trade dynamics that influence Wall Street also ripple through the cryptocurrency market.

Currently, the crypto market shows weakness in anticipation of results, with Bitcoin struggling to maintain above $105,000.

A concrete agreement could trigger a rally, while stagnation or escalation could lead to further corrections.