Bitcoin Pulls Back as U.S.-China Trade Truce Unfolds, Bulls Ease Up

After a month of impressive gains, Bitcoin is experiencing a retreat following the announcement of a temporary trade truce between the U.S. and China.

As part of the familiar market pattern of “buy the rumor, sell the news,” Bitcoin (BTC) has seen a decline after the two countries agreed over the weekend to suspend tariffs on each other’s goods for the next 90 days. Bitcoin had been on a strong upward trajectory, surging from a low of just under $75,000 in mid-April after President Trump’s shock tariff announcement. By late last week, it had surpassed $100,000, and during the early hours of Monday, it reached nearly $106,000.

However, at the time of writing, Bitcoin has pulled back to $101,300, showing a 3% drop over the past 24 hours.

Stocks Surge as Bitcoin Takes a Breather

In contrast to Bitcoin’s retreat, stock markets are showing strong performance. The Nasdaq jumped by 3.9%, and the S&P 500 rose by 3.1% before the market close. Bitcoin’s initial rally had outpaced these traditional markets, making today’s underperformance appear more balanced in comparison.

“Bitcoin has clearly outperformed recently, largely due to its detachment from trade war risks,” commented Aurelie Barthere, a principal research analyst at Nansen. “Now, as the trade situation improves, we expect altcoins, U.S. equities, and the U.S. dollar, which underperformed earlier this year, to start catching up.”

Short-Term Boost for Risk Assets

Although Bitcoin is down today, market observers are still optimistic about the medium-term outlook for risk assets. Kirill Kretov, trading automation expert at CoinPanel, noted that the trade truce provides a “clear short-term positive signal” for cryptocurrencies and other riskier assets. While the pause may be short-lived, it reduces inflationary pressures and supports global liquidity, both of which are generally seen as bullish for Bitcoin.

However, Kretov also warned that the temporary nature of the agreement could introduce some volatility down the road, especially as the 90-day period nears its end without a broader deal in place.

“Lower tariffs reduce inflationary pressures and improve liquidity, which is generally bullish for Bitcoin,” Kretov said. “But as the truce nears its expiration, we might see more volatility in the market.”