Bitcoin and Crypto Markets Rally on Positive US Inflation Data and US-China Trade Agreement
The cryptocurrency market experienced strong gains over the weekend, driven by positive economic news and easing geopolitical tensions. Bitcoin rose 5.3% to $112,866, up from $107,088 a week earlier. Meanwhile, the total cryptocurrency market capitalization climbed 14% to $3.73 trillion, recovering from October’s low of $3.24 trillion.
Altcoins also joined the rally with substantial gains across the board. Notable winners included Hyperliquid, Virtuals Protocol, Zcash, and Aerodrome Finance, each surging more than 10% within 24 hours.
### US Inflation Data Fuels Optimism for Federal Reserve Rate Cuts
A key catalyst behind the crypto rally was the release of favorable US inflation data. The Bureau of Labor Statistics reported that the Consumer Price Index (CPI) rose slightly from 2.9% in August to 3.0% in September. More importantly, core inflation, which excludes volatile food and energy prices, dropped from 3.1% to 3.0%. These figures came in lower than many analysts had anticipated.
The cooler inflation readings have increased expectations that the Federal Reserve may cut interest rates soon. ING Bank analysts now predict a rate cut at this week’s Fed meeting, with the possibility of another cut in December.
### Traditional Markets Reach Record Highs
The positive inflation data also boosted traditional stock markets. The Dow Jones Industrial Average, S&P 500, and Nasdaq 100 all reached all-time highs as investor risk appetite returned.
### US-China Framework Trade Agreement Eases Market Tensions
Another major factor lifting markets was the announcement of a framework trade agreement between the United States and China. US Treasury Secretary Scott Bessent confirmed that Washington and Beijing have agreed to halt the 100% tariffs that President Trump had threatened earlier this month.
Following the announcement, Bitcoin surged past $113,000, marking its highest level in nearly two weeks. President Trump’s arrival in Malaysia to meet Chinese President Xi Jinping at the APEC Summit further cemented positive market sentiment.
The trade deal helped shift sentiment from risk-off to risk-on, with Asian and US equity futures climbing while gold prices declined.
### Technical and Institutional Factors Support Momentum
From a technical perspective, Bitcoin has maintained a position above its 200-day moving average, which analysts consider a bullish indicator suggesting continued upward momentum. Additionally, institutional activity in the crypto space has increased after October’s market downturn, with major funds and corporate treasuries moving back into crypto assets.
However, some caution remains among analysts who warn this rally could be a “dead cat bounce”—a temporary rebound before a potential resumption of the downtrend. Bitcoin faces resistance at the 100-day moving average, a level closely watched as a possible barrier to further gains.
### Upcoming Events to Watch
Market participants are now focused on several key events that could influence future trends. The Federal Reserve is set to announce its interest rate decision this week, while major tech companies including Apple, Microsoft, and Meta Platforms are scheduled to report earnings. These developments may impact broader market sentiment and subsequently affect cryptocurrency prices.
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Bitcoin traded at around $113,000 on Sunday following the finalization of the US-China trade framework after meetings in Malaysia. The combination of easing trade tensions and softer inflation data has rejuvenated both the crypto and traditional financial markets, signaling a potentially bullish period ahead.
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