Bitcoin reversed some of the post-fed losses early Thursday after the meeting between President Donald Trump and his Chinese counterpart Xi Jinping produced favorable outcomes.
Speaking of Air Force One, the US president also reportedly said it was a one-year deal that would be extended. Trump also said that the rare Earths issue had been fixed and there were no more roadblocks with them.
Trump also said that US tariffs on China would be lowered to 47% from 57%. He said he will go to China in April and the XI will come to the US at some stage after that, in comments reported by Reuters.
BTC briefly fell to $108,000, extending an overnight decline from $113,000 to $110,000, which was triggered by federal Reserve chairman Jerome Powell reducing the certainty of a rate cut in December.
XRP and LED losses in the majors with a 4% slide. Ether Solana’s Sol, BNB and Cardano’s ADA showed losses of 3%.
Futures tied to the S&P 500 also traded lower as the dollar index rallied around 99.00 holding on to overnight gains.
According to the BBC, Trump left South Korea, without announcing the outcome of his talks with Xi. “They shook hands at the end of the meeting before leaving,” the BBC report said.
The bar of expectations was set high after Trump said earlier this week that both countries were close to reaching a trade deal. Trade tensions have risen recently after Trump threatened to impose 100% tariffs on Chinese goods in response to Beijing’s decision to tighten its grip on rare earth exports.
Earlier on Wednesday, 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 will end the tapering of its asset purchases – a process known as quantitative tightening – on December 1.
The policy of the twins changes the ground squarely in Crypto’s wheelhouse. A lower benchmark rate at 3.75% –4% signals the start of easier financial conditions after two years of restraint, softening real yields and supporting risk appetite.
Bitcoin and other non-yielding assets are likely to benefit as liquidity returns and investors rotate positions that are heavy on growth cash and alternative stores of value.
The end of the balance sheet runoff on December 1 effectively restored net liquidity to the system, relieving pressure on banks and improving market depth in risk assets. That environment may have spurred risk-taking behavior among crypto traders and changed the course of action in the derivatives markets.
The larger swing factor remains geopolitical, however. If the US-China trade deal strengthens and tariffs roll in further, global risk sentiment could advance, reinforcing the Fed’s dovish tone and extending Bitcoin’s rebound past $115,000. But if the talks are not combed, investors can rest fresh long while the dollar companies and volatility of volatility again.
As such, easier monetary policy and avoidance of trade friction form a rare alignment that supports the crypto markets in November – although the optimization still depends on whether this “soft landing” holds liquidity that truly returns.
