Investors turn optimistic ahead of FOMC meeting and trade negotiations between Washington and Beijing
Bitcoin Recovers After Record $19B Liquidation Shock
Bitcoin (BTC) has found renewed strength after last week’s record-breaking $19 billion crypto liquidation event, recovering above $116,000 as markets respond positively to signs of a temporary truce in the U.S.–China trade dispute.
According to Cointelegraph, investor sentiment shifted from “fear” to “neutral” on Monday following reports that Washington and Beijing reached a preliminary framework for an import tariff deal. The development calmed fears of further escalation ahead of Thursday’s scheduled meeting between President Donald Trump and President Xi Jinping.
Earlier in October, Trump’s renewed tariff threats triggered a steep market sell-off, sending Bitcoin briefly plunging to $104,000 and wiping out billions in leveraged positions.
Trade Truce and Fed Policy Spark Recovery
Market watchers say two major catalysts are driving Bitcoin’s rebound: the expected U.S. Federal Reserve interest rate decision on Wednesday and the anticipated U.S.–China trade deal later in the week.
“Recent optimism surrounding the U.S.–China trade negotiations helped ignite a weekend rally in Bitcoin. Signs of progress have lifted broader risk sentiment,” said Wenny Cai, co-founder and COO at SynFutures.
The renewed optimism follows comments from President Trump, who expressed confidence that both sides will “come away with the deal”, as reported by CNBC. His remarks, made aboard Air Force One, came just weeks after he threatened to impose a 100% tariff on Chinese imports effective Nov. 1 if no agreement was reached.
Bitcoin Regains Key Support Zone
Bitcoin’s recovery above $114,000 — the short-term holder (STH) cost basis — is being viewed as a crucial technical milestone. Analysts note that sustained trading above this level reduces the risk of short-term holder capitulation, which often triggers additional selling pressure.
Now, with macro pressures easing and risk appetite improving, crypto markets appear to be stabilizing, at least in the short term.
The upcoming Federal Open Market Committee (FOMC) meeting is the next major event on investors’ radar. Markets are currently pricing in a 96.7% probability of a 25-basis-point interest rate cut, according to the CME Group’s FedWatch tool.
A dovish outcome would likely further strengthen risk assets, including Bitcoin, as traders position for a lower-rate environment amid cooling inflation and signs of global economic de-escalation.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.