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Bitcoin regained its footing on Thursday after U.S. President Donald Trump announced a one-year trade agreement with China, marking a turning point in the ongoing tariff standoff between the two economic powers. The deal, centered on rare earths and critical minerals, also led to an immediate reduction in tariffs — a move that triggered a V-shaped recovery in Bitcoin’s price above $110,000.
Trade Relief Fuels Market Optimism
President Trump described his meeting with Chinese President Xi Jinping as “amazing,” confirming that both nations had agreed to a limited but crucial trade arrangement. The announcement eased market jitters following weeks of tariff tension that had rattled global equities and cryptocurrencies alike.
The U.S. will lower its average tariffs on Chinese goods from 57% to 47% and cut fentanyl-related tariffs to 10%. Additionally, export restrictions on semiconductors, especially Nvidia chips, will be loosened — a sign of improving diplomatic and trade relations.
The one-year deal will be reviewed annually, ensuring continued negotiation and flexibility. Trump also confirmed mutual visits — Xi will travel to Washington, and Trump will visit Beijing in April 2026 — to solidify the cooperation further.
Ripple Effects Across Global Markets
The announcement sparked an immediate reaction across global financial markets. Asian and U.S. equity indices rebounded, with investor sentiment turning risk-on. The crypto market mirrored this optimism, as Bitcoin jumped from below $108,000 to $110,250 within hours of the announcement.
Ethereum, XRP, Solana, BNB, and Cardano also recorded gains between 1–2%, reversing earlier losses triggered by uncertainty around Federal Reserve policy and global trade tensions.
Crypto traders interpreted the U.S.-China deal as a sign of easing macro pressure — a factor that could improve liquidity and restore institutional confidence in digital assets.
Bitcoin Price Action and Market Sentiment
At press time, Bitcoin is trading near $110,250, down 2% in the last 24 hours but showing renewed strength compared to Wednesday’s low of $107,957. Trading volume remained mostly unchanged, rising by just 2%, suggesting that while momentum is returning, traders remain cautious.
The rebound coincided with fresh news of a third Bitcoin transfer by SpaceX and remarks from Federal Reserve Chair Jerome Powell, who maintained a hawkish tone on interest rates. These factors have kept some investors on the sidelines, awaiting clearer macro direction before re-entering the market aggressively.
ETF Outflows Indicate Short-Term Caution
Despite the recovery in prices, spot Bitcoin ETFs in the United States recorded net outflows of $471 million, according to SoSoValue data. All 12 active Bitcoin ETFs reported withdrawals, with Fidelity’s FBTC leading the outflows at $164.4 million, followed by BlackRock’s IBIT with $88.1 million.
Ethereum ETFs also saw $81.4 million in outflows, indicating broader investor caution across crypto-linked financial products. Only BlackRock’s ETHA managed to post a modest inflow, highlighting selective confidence among institutional investors.
Analysts suggest that this behavior reflects profit-taking rather than outright bearishness. With Bitcoin still consolidating between $107,000 and $113,000, institutions may be temporarily rotating out of ETFs while awaiting stronger macro signals from both the Fed and geopolitical developments.
Analysts See $120K BTC Target on the Horizon
Despite the ETF outflows, crypto analysts remain optimistic. Ali Martinez, a well-known on-chain analyst, noted that Bitcoin’s Sharpe Ratio — a measure of risk-adjusted returns — is moving from high-risk to low-risk territory, typically a precursor to new bullish cycles.
“The shift in the Sharpe Ratio pattern suggests that Bitcoin could soon enter a fresh accumulation phase,” Martinez said, adding that such setups have historically preceded major rallies.
If macro conditions continue to stabilize — particularly with reduced tariffs, better trade visibility, and dovish expectations from the Federal Reserve — Bitcoin could be positioned for a run toward $120,000 in November, according to several trading desks.
Macro Tailwinds Align for Bitcoin’s Next Move
The combination of easing trade tensions and a potentially softer Fed policy stance creates an ideal backdrop for Bitcoin and other risk assets. The upcoming Federal Open Market Committee (FOMC) decision will be pivotal in determining how much liquidity flows into markets over the next quarter.
If the Fed confirms a 25 basis-point rate cut, it would further boost risk sentiment, reducing the appeal of cash-heavy positions and encouraging allocations into assets like Bitcoin.
Meanwhile, Trump’s diplomatic breakthrough with China signals a temporary cooling of global economic uncertainty — a condition that has historically benefited decentralized assets seen as hedges against fiat instability.
Outlook: Relief Rally or Sustainable Growth?
While traders welcome Bitcoin’s rebound, analysts warn that the recovery may remain fragile unless supported by consistent macro and on-chain momentum. Sustained buying interest, especially from institutional investors, will be crucial to push BTC beyond the $115,000 resistance zone.
Still, the alignment of lower tariffs, easing inflation pressures, and improved investor sentiment marks a significant shift from the caution seen earlier in October. As the world’s two largest economies return to dialogue, Bitcoin’s role as a global risk barometer is once again being put to the test — and for now, the signs point toward renewed optimism.
