Bitcoin surged on Monday, following a broad rally in risk-on markets, after the United States and China announced a preliminary agreement aimed at halting the escalation of tensions in their ongoing trade dispute.
This rise was also fueled by increased risk appetite in the markets, following U.S. inflation data that came in weaker than expected, reinforcing investors’ expectations that the Federal Reserve would cut interest rates at its meeting this week.
Bitcoin climbed 3.5% to $115,504, breaking through the trading range that had held between $100,000 and $110,000 for most of October.
Over the weekend, U.S. and Chinese officials confirmed that they had reached a preliminary framework for a trade deal, which will be built upon when Presidents Donald Trump and Xi Jinping meet later this week. The agreement addresses several contentious issues, including China’s restrictions on rare earth exports, high U.S. tariffs, and rising shipping costs between the two countries.
News of progress in negotiations between the world’s two largest economies boosted investor sentiment, with markets betting against an immediate escalation in the ongoing trade conflict. Although the cryptocurrency market is not directly affected by trade tensions, shifts in global sentiment often have a clear impact on digital asset prices.
Other cryptocurrencies also saw broad gains alongside Bitcoin. Ethereum rose 7.5% to $4,240, while BNB increased 2.8% to $1,151. Solana, Cardano, and XRP recorded gains ranging from 1.5% to 6%. Among meme coins, Dogecoin climbed 6.3%, while $TRUMP rose about 4.2%.
Cryptocurrency prices had already posted strong gains late last week after U.S. inflation data for September came in slightly weaker than expected, further boosting bets on interest rate cuts.
Markets are expecting the Federal Reserve to reduce interest rates by 25 basis points this week, mirroring the move made last September, amid growing confidence that the central bank will adopt a more dovish stance.
Low interest rates are seen as supportive for the cryptocurrency market, providing greater liquidity that can flow into higher-risk assets a key factor behind previous bullish waves, particularly in 2021.
Additionally, the earnings results of major U.S. tech companies are expected to influence market trends this week, as cryptocurrency prices often move in tandem with tech stocks, despite lagging behind their performance in October.
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