The recent economic developments surrounding U.S.-China relations have stirred responses across various markets, particularly in the world of cryptocurrency. Despite positive trade announcements, major cryptocurrencies have experienced unexpected downturns, raising questions about market stability.
U.S.-China Trade Agreement: Mixed Signals for Cryptocurrencies
On a recent social media platform, former U.S. President Donald Trump communicated his agreement with China’s President Xi Jinping on several key issues, further indicating a healthier trade relationship. This included a significant reduction of tariffs, originally set at 100%, now adjusted to 47%. Yet, despite this optimistic announcement, cryptocurrencies like Bitcoin and Ethereum suffered notable price drops.
Bitcoin witnessed a decline, plummeting to approximately $107,000, while Ethereum’s value fell to around $3,700. Many traders had anticipated that a trade resolution would invigorate the crypto market, especially after the previous turmoil that led to a historic from previous investments instead of a renewed interest in accumulation. This shift in investor sentiment can directly correlate to the declining prices of these cryptocurrencies.
Further analyses underline that several U.S. Bitcoin ETFs have turned into net sellers, with recent outflows averaging 281 BTC over the past week—marking some of the weakest figures recorded this year. Similarly, Ethereum ETFs have seen stagnation in inflows since mid-August, further emphasizing declining investor confidence.
Related Reading: Ethereum Outperforming Bitcoin in Key Metrics
Moreover, demand on U.S. crypto exchanges appears to be slowing down. For instance, the Coinbase premium, a crucial indicator of buying interest, has flattened to zero for both Bitcoin and Ethereum. Historical data shows that price surges are typically associated with positive premiums, implying that the current stagnation may reflect a decrease in domestic buying pressure.
