US President Donald Trump has revealed that he has reached an agreement with Chinese President Xi Jinping on trade relations. Despite his revelation, Bitcoin and Ethereum Prices has fallen sharply, raising concerns that a bear market is imminent.
Donald Trump strikes a deal with China, but Bitcoin and Ethereum decline
In a Truth on social mediaDonald Trump announced that he and the Chinese president agreed on “many things” while others of great importance were close to being resolved. As part of the deal, the US president said the proposed 100% tariffs would no longer be in effect and reduced the customs tariffs on China from 57% to 47%. However, despite these agreements between the two countries, the prices of Bitcoin and Ethereum collapsed following its announcement.
The price of Bitcoin fell to $107,000 following the agreement between the United States and China, which included a one-year truce. Meanwhile, Ethereum fell to $37,000 that day, amid a broader crypto market crash. A US-China trade deal is expected to spark a significant market recovery, given that trade tensions initially contributed to the $19 Billion Liquidation Event on October 10.
However, the trade deal between US President Donald Trump and the Chinese president appears to have been priced in, which is why Bitcoin and Ethereum, as well as the broader crypto market, have crashed. The market notably recovered on Sunday after the US Treasury Secretary Scott Bessent revealed that they had arrived at a trade framework that both presidents could work with.
It is worth noting that Fed Chairman Jerome Powell’s speech contributed to the decline in Bitcoin and Ethereum prices. Powell had mentioned FOMC press conference that a Fed rate cut in December was far from certain. This has triggered bearish sentiment in the market as traders currently anticipate further cuts of 25 basis points (bps) during December. FOMC meeting.
Slowing demand for BTC and ETH
A CryptoQuant Analysis revealed a notable slowdown in US investor demand for Bitcoin and Ethereum in the spot and derivatives markets. The analysis indicated that this was one of the reasons for the decline in the prices of BTC and ETH. ETF EntriesSpot FX premia and basic futures metrics all suggest this current phase reflects “profit taking and cautious positioning” rather than renewed accumulation.
CryptoQuant further noted that US spot Bitcoin ETFs became net sellers, with a seven-day average outflow of 281 BTC, which is one of the lowest figures since April. Likewise, the Ethereum ETF Entries have almost stalled since mid-August, which underlines “moderate investor confidence”.
Related reading: Ethereum now outperforms Bitcoin in this major metric
The analysis also found that spot demand on US crypto exchanges has slowed. THE Coinbase Bonus for Bitcoin and Ethereum reached zero, underscoring the slowdown in demand. CryptoQuant noted that price increases historically coincide with positive premiums. As such, the flattening indicates a reduction in domestic buying pressure.
Featured image from iStock, chart from Tradingview.com
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