The crypto market saw a sharp move higher after news broke that the United States and China had reached a temporary agreement to reduce tariffs. The deal, announced Monday, includes a 90-day pause on new trade penalties and major cuts to existing tariffs. Markets reacted quickly – and so did Bitcoin.
Bitcoin surged past $105,000 in early Monday trading, its highest level since January. It later pulled back to around $103,000, but overall sentiment in the market remained strong.
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Details of the Agreement
Under the new terms, the US will lower its tariffs on Chinese imports from 145% to 30%, while China will reduce duties on US goods from 125% to 10%. Both governments confirmed that negotiations will continue, with alternating rounds of talks planned over the coming weeks.
The joint statement released by Washington and Beijing said both sides aim to “maintain constructive engagement” and avoid further escalation. The agreement followed two days of meetings in Geneva, where US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng led the talks.
Wall Street Rallies
The response from traditional markets was immediate. The Dow Jones Industrial Average climbed over 900 points, while the S&P 500 and Nasdaq rose 2.4% and 3.2% respectively. Gains were strongest in sectors most exposed to trade – particularly tech, retail, and manufacturing.
The US dollar index jumped to a one-month high, and Treasury yields rose as investors moved away from safe-haven assets. The shift in sentiment reflected growing hopes that the tariff de-escalation might be extended beyond the initial 90-day window.
Crypto Market Reaction
While stocks also rallied, Bitcoin was one of the first assets to reflect the shift in sentiment. The initial move above $105K marked a key breakout level, though the retracement to $103K suggests traders remain cautious ahead of further developments.
Despite Bitcoin’s dip, the broader crypto market stayed positive. US-based projects saw some of the strongest gains – XRP surged 9%, while Stellar (XLM) and Hedera (HBAR) rose 5% and 6%, respectively. Analysts point to renewed interest in digital assets and riskier investments.
What’s Next?
Although the 90-day agreement doesn’t resolve all issues between the US and China, it has removed short-term uncertainty. This has helped lift sentiment across both traditional and digital markets.
If talks continue in a positive direction, it could encourage a stronger rebound in both stocks and cryptocurrencies. Investors may grow more confident in taking on risk, especially in sectors that were under pressure from trade tensions. This would also reduce fears of a US recession.
Further updates from the negotiations, combined with upcoming inflation data and fiscal policy signals, will likely shape how markets behave in the weeks ahead. For now, traders are watching closely to see if this temporary truce becomes something more lasting.
Read also: How Interest Rates Impact Bitcoin: Exploring the Correlation
