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U.S. President Donald Trump disclosed that he had struck an agreement with China’s President Xi Jinping regarding trade interactions. Despite this disclosure, Bitcoin and Ethereum values plummeted sharply, raising alarms of a potential bear market.
Donald Trump Concludes Agreement With China, Yet Bitcoin and Ethereum Drop
In a Truth Social entry, Donald Trump stated that he and China’s leader concurred on “numerous matters,” while other critical issues were nearing resolution. As part of the pact, the U.S. leader indicated that the planned 100% tariffs would cease to be implemented and decreased the tariffs on China from 57% to 47%. However, in spite of these arrangements between the nations, Bitcoin and Ethereum values fell following his statement.
The price of Bitcoin fell to as low as $107,000 after the U.S.-China agreement, which included a year-long truce. Meanwhile, Ethereum slipped to $3,7000 on the same day amid a comprehensive crypto market downturn. A trade accord between the U.S. and China had been anticipated to trigger a considerable market surge, especially since trade conflicts had initially led to the $19 billion liquidation event on October 10.
Nevertheless, the trade agreement between U.S. President Donald Trump and China’s leader seemed to have been factored into the prices, which is why Bitcoin and Ethereum, along with the wider crypto market, tumbled. Interestingly, the market experienced a rally on Sunday after U.S. Treasury Secretary Scott Bessent indicated that they had established a trade framework for both leaders to utilize.
It’s notable that Fed Chair Jerome Powell’s address contributed to the downturn in Bitcoin and Ethereum values. Powell mentioned at the FOMC press briefing that a Fed rate reduction in December was highly uncertain. This ignited bearish sentiment within the market as traders are presently factoring in another 25 basis points (bps) cuts at the December FOMC gathering.
Decrease In Demand For BTC and ETH
A CryptoQuant examination indicated a significant drop in U.S. investor interest for Bitcoin and Ethereum across both spot and derivatives markets. The examination suggested this as a factor for the diminished BTC and ETH values. ETF inflows, spot exchange premiums, and futures basis metrics all imply that this current period embodies “profit-taking and cautious positioning” instead of renewed accumulation.
CryptoQuant further highlighted that U.S. spot Bitcoin ETFs have become net sellers, reflecting a seven-day average outflow of 281 BTC, marking one of the weakest performance figures since April. Similarly, the Ethereum ETF inflows have nearly stagnated since mid-August, emphasizing “diminished investor trust.”
Related Reading: Ethereum Is Currently Outperforming Bitcoin In This Significant Metric
The examination additionally disclosed that spot interest on U.S. crypto exchanges has decelerated. The Coinbase premium for both Bitcoin and Ethereum has hit zero, emphasizing the decline in demand. CryptoQuant observed that price surges historically accompany positive premiums. Consequently, the flattening indicates decreased domestic purchasing pressure.
Featured image from iStock, chart from Tradingview.com
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