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Bitcoin surged on Monday, tracking a rally across global risk assets after the U.S. and China announced a preliminary framework deal aimed at defusing trade tensions, while soft U.S. inflation data bolstered expectations of a Federal Reserve rate cut later this week.
The world’s largest cryptocurrency climbed 3.5% to $115,504.0 by 05:22 GMT, breaking above the $110,000 ceiling that had capped prices for much of October.
Fed Rate Cut Expectations Spark Risk Appetite
Markets are now pricing in an almost certain 25-basis-point rate reduction when the Fed concludes its two-day meeting on Wednesday, following September’s softer-than-expected CPI inflation.
This would mark the second consecutive rate cut after a similar move in September, signaling a potential shift toward sustained monetary easing. Lower borrowing costs tend to boost speculative assets like crypto by freeing up liquidity and reducing the opportunity cost of holding non-yielding investments.
The CME FedWatch Tool showed traders assigning a near 100% probability to the cut, with expectations rising for another reduction before year-end.
US–China Trade Deal Lifts Sentiment
Crypto markets also found support in news that U.S. and Chinese negotiators reached a framework trade deal in Kuala Lumpur over the weekend. The agreement reportedly covers contentious issues such as rare earth export curbs, tariffs, and shipping fees, and will be further discussed when Presidents Donald Trump and Xi Jinping meet later this week in South Korea.
Trump confirmed optimism about the talks, saying he believed a “deal with China” was imminent, easing concerns of a renewed trade escalation that had rattled risk assets throughout October.
While digital assets are not directly affected by trade policies, improved market sentiment often translates into greater inflows into crypto, reversing the defensive positioning seen earlier this month.
Altcoins Rally as Liquidity Outlook Improves
Broader crypto markets rallied in tandem with Bitcoin.
- Ether (ETH) jumped 7.5% to $4,240.35, leading the gains among major altcoins.
- BNB advanced 2.8% to $1,151.90.
- Solana (SOL), Cardano (ADA), and XRP climbed between 1.5% and 6%.
- Among memecoins, Dogecoin (DOGE) rose 6.3%, while $TRUMP gained 4.2%.
The sector’s rebound followed last week’s U.S. inflation report, which reinforced the likelihood of easier monetary conditions—a backdrop historically favorable for digital assets.
Outlook: Monetary Easing Could Reignite Crypto Momentum
With rate cuts, trade progress, and upbeat global equity performance aligning, traders are eyeing potential upside in crypto through the week.
Analysts caution, however, that sustained momentum will depend on the Fed’s tone and its forward guidance on future policy. A dovish stance could reignite bullish sentiment across digital assets, while a cautious message may see profit-taking resume.
For now, Bitcoin’s breakout above $110,000 is seen as a technical signal of renewed momentum, suggesting a potential move toward the $118,000–$120,000 zone if optimism holds into the Fed meeting.
