After last week’s market crash, cryptocurrency investors were left in a wave of uncertainty as potential escalations in trade between the U.S. and China were back on topic. Bitcoin tanked by over 14% in value in a single day, while the market erased close to a trillion dollars in a whim.
Investors became extremely risk-averse after a series of tweets by the American President Trump threatened to impose another 100% tariff on Chinese imports. Markets were caught off guard by this development, as it looked like trade-war talk was already in the past.
Only two days later, Trump appears to be ready to calm things down and decrease the temperature of the standoff.
In a post made on TruthSocial, Trump reassured followers that “it will all be fine,” referring to China’s economic position and his own willingness to help rather than hurt. He even called President Xi “highly respected,” signaling a shift from confrontation to diplomacy.
This sudden change in tone is already showing signs of relief in crypto markets. Over the last h24 hours, Bitcoin gained 1.8% in value, while the potentially oversold altcoins are posting an even speedier recovery. The asset reacted almost immediately after Trump’s message, picking up some bullish momentum on a short-term chart.
Ethereum is now at a 7% increase on Sunday, while the third-largest altcoin in the market, BNB, is seeing an impressive near 11% growth in the last 24 hours.
Weekends are notoriously slow for crypto markets, and we’ll only know for certain if bulls are ready to take the reins by tomorrow. However, the early indication that the U.S. is looking to appease relations with China serves as a good indicator that investors may be willing to re-enter riskier positions sooner than expected.
Next week is shaping up to be a very action-packed one. On top of geopolitical developments and a potential market recovery, important macroeconomic reports will reveal how U.S. inflation is doing under lower interest rates.
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