Crypto Market Rises as US and China Reach Trade Deal Framework

The US and China have announced they have reached a framework to address and potentially resolve their trade disagreements, marking a significant step in international trade. This development comes after two days of talks in London, where key figures, including Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Chinese Vice Premier He Lifeng, were involved. The framework aims to implement the Geneva consensus, which seeks a durable resolution to longstanding trade tensions. The agreement outlines strategies to reduce trade barriers and address issues such as tariffs on Chinese goods and access to rare earth minerals.

Vice Commerce Minister Li and Trade Representative Jamieson Greer emphasized that the US and China agree to move forward with a trade truce, fostering a conducive environment for further negotiations. Lutnick told reporters that this is a vital step to keep the trade truce back on track. The framework deal aims to provide a clear path to implement the Geneva agreement. This progress is seen as pivotal by experts like Scott Bessent, who believe that the US-China trade talks have the potential to resolve their trade disputes and bring a lasting peace to the US-China trade relationship.

Trade talks between American and Chinese officials will continue in London for the second straight day, with the involvement of trade representatives from both nations. During the discussions, countries focus on how the exportation of key goods and rare earth elements can disrupt the world’s supply chains and have negative effects on the global economy.

People involved in trade continue to hope that the exchanges may yield a bigger trade agreement. The first round of talks held in Geneva last month led to stocks rising, which was good news after the dip caused by April’s tariff moves.

According to Reuters, China is blocking shipments of key resources important to the aerospace, auto industry, defense, and semiconductor sectors.

Bitcoin was the main factor in the recovery of digital assets on Monday at around $110,263 in the US session, as traders reacted positively to news of a potential trade deal. The total value of cryptocurrencies went up to $3.57 trillion, increasing from the previous week’s dip of $3.29 trillion and giving confidence to the market, despite ongoing trade war discussions.

Bitcoin Dips Amid Market Volatility as Trump-Musk Clash Impacts Sentiment

The value of Bitcoin (BTC) went down to $101,095 on Friday because of ongoing uncertainty in the markets, exacerbated by the trade war. This drop in cryptocurrency price happened soon after Thursday’s market reacted to the dispute between President Trump and Tesla CEO Elon Musk. The public exchange of words placed pressure on both the NASDAQ and Tesla’s stock on Thursday. These stocks, however, started recovering by Friday, possibly in anticipation of a trade deal. Even so, the crypto market capitalization was down by 4% in the last 24 hours.

Traders’ opinions about Bitcoin have changed considerably. The Fear and Greed Index showed that investors were fearful on Friday by decreasing to 45, reflecting the uncertainty surrounding the trade war. On the other hand, readings were fluctuating between 57 and 60 just recently, indicating that investors were neutral.

Since volatility has gone up, users of derivatives platforms have had to close many of their positions, particularly in light of the trade war developments. Santiment’s data shows that those who held Bitcoin earned more than $23 billion between June 2 and June 5. When Bitcoin dropped in price, the Network Realized Profit/Loss also went up, indicating that many people took their profits from the market.

Previously, big levels of profit have usually led to another drop in the price of bitcoin, which may be influenced by external factors such as the trade war. According to Coinglass’ data, long positions have accounted for $305 million in liquidations in the last 24 hours while short positions have just seen $41 million. Given that the long/short ratio is 0.91, it looks like investors mainly bet against price increases and might have increased the pressure on the stock.

A Bloomberg report dated June 4 showed that JPMorgan may soon give Bitcoin ETF-backed loans. According to the report, insiders say clients who work with JPMorgan’s wealth management may soon treat the trust as collateral.

Still, Strategy has now launched an IPO for its Stride Preferred Stock (itten as STRD) aiming to bring in about $979.7 million. The capital will assist the company in its daily business and in buying Bitcoin; the company has noted that this strategy is crucial during the current trade war climate.

Although the above factors tend to support higher prices, Bitcoin was unable to make a big bounce, and it kept consolidating instead.