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U.S. President Donald Trump revealed that he had reached a deal with China’s President Xi Jinping in relation to trade relations. Despite his revelation, Bitcoin and Ethereum prices declined sharply, sparking concerns of an imminent bear market.
Donald Trump Makes Deal With China, But Bitcoin and Ethereum Decline
In a Truth Social post, Donald Trump announced that he and China’s president agreed on “many things,” while others of high importance were close to being resolved. As part of the agreement, the U.S. president stated that the proposed 100% tariffs would no longer go into effect and reduced the tariffs on China from 57% to 47%. However, despite these deals between the two countries, Bitcoin and Ethereum prices crashed following his announcement.
The Bitcoin price dropped to as low $107,000 following the U.S.-China agreement, which included a 1-year truce. Meanwhile, Ethereum dropped to as low as $3,7000 on the day amid a broader crypto market crash. A trade deal between the U.S. and China was expected to spark a significant market rally, given that trade tensions had initially contributed to the $19 billion liquidation event on October 10.
However, the trade agreement between U.S. President Donald Trump and China’s president appeared to have been priced in, which is why Bitcoin and Ethereum, along with the broader crypto market, crashed. Notably, the market had rallied on Sunday after the U.S. Treasury Secretary Scott Bessent revealed that they had reached a trade framework for both presidents to work with.
It is worth noting that Fed Chair Jerome Powell’s speech contributed to the decline in Bitcoin and Ethereum prices. Powell had mentioned at the FOMC press conference that a December Fed rate cut was far from certain. This sparked bearish sentiment in the market as traders are currently pricing in another 25 basis points (bps) cuts at the December FOMC meeting.
Slowdown In Demand For BTC and ETH
A CryptoQuant analysis revealed a noticeable slowdown in U.S. investor demand for Bitcoin and Ethereum across both spot and derivatives markets. The analysis indicated this was one of the reasons for the lower BTC and ETH prices. ETF inflows, spot exchange premiums, and futures basis metrics all suggest that this current phase reflects “profit-taking and cautious positioning” rather than renewed accumulation.
Source: Chart from CryptoQuant CryptoQuant further noted that U.S. spot Bitcoin ETFs have turned net sellers, with a seven-day average outflow of 281 BTC, which is one of the weakest readings since April. Similarly, the Ethereum ETF inflows have almost stalled since mid-August, which underscores “subdued investor confidence.”
Related Reading: Ethereum Is Now Outperforming Bitcoin In This Major Metric
The analysis also revealed that spot demand on U.S. crypto exchanges has slowed. The Coinbase premium for both Bitcoin and Ethereum has reached zero, which underscores the slowdown in demand. CryptoQuant noted that price rallies historically coincide with positive premiums. As such, the flattening indicates reduced domestic buying pressure.
Featured image from iStock, chart from Tradingview.com
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