In a backdrop where geopolitical milestones tend to inject optimism into financial markets, the crypto sector appears to be somewhat immune—at least for now. According to recent reports, following a significant trade agreement between the United States and the People’s Republic of China, the general sentiment in the cryptocurrency market remains muted and cautious.
1. The Trade Agreement: A Brief Overview
Just last week, the U.S. government announced it had struck a trade deal with China, which was heralded by the White House as a “major win,” reinforcing economic strength and national security, while prioritising the interests of American workers and families.
The significance of this agreement extends beyond traditional trade goods—it has important implications for global liquidity, cross‑border investment flows and, by extension, for risk assets including cryptocurrencies.
2. Crypto Sentiment: Still in the Fear Zone
One of the most commonly referenced gauges of crypto market mood is the Crypto Fear & Greed Index. Despite the upbeat headlines on the trade front, the index remains in the “Fear” region—hovering around 37 points (up modestly from 33 the prior day).
Why might this be the case? A few possible explanations:
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The broader macro‑ and regulatory environment (for example, interest rates, inflation, crypto regulation) still exerts strong downward pressure on risk appetite.
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Trade deals, even when positive, may take time to translate into improved sentiment for speculative assets like crypto.
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Past episodes show that when trade tensions spike (e.g., threats of tariffs), crypto markets often react quickly; but the converse—resolving tensions—does not necessarily trigger an equally sharp rebound. For instance, when the 100% tariff threat from the U.S. was announced, the crypto market suffered major liquidation of about $19 billion within 24 hours.
3. Market Reality vs. Narrative
Amidst all the commentary, it’s noteworthy that actual price movement in major coins has been modest. For example:
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Bitcoin (BTC) is trading near $110,354, up only ~0.26% in 24 hours.
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Ethereum (ETH) stands around $3,895, with a similar small gain (~0.84%) in the same period.
In other words, the trade‑deal headlines have not (yet) initiated a breakout in crypto prices or a strong shift in investor psychology.
4. Analysts’ Views: Still Early in the Cycle
Several crypto analysts interpret the current state as being in the early stages of a bullish cycle rather than a fully fledged up‑trend. For instance, market commentator Michaël van de Poppe suggested that we may be at the “first steps” of an increase across both altcoins and Bitcoin.
Moreover, the White House indicated it will maintain the suspension of retaliatory tariffs on Chinese imports until at least 10 November 2026—this may reduce one source of heightened uncertainty.
Nevertheless, the signal has not yet triggered strong investor confidence.
5. Implications & What to Watch
For investors and market watchers, here are some key take‑aways and watch‑points:
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Sentiment leads but lags: Just because a favourable macro event occurs doesn’t mean crypto market sentiment will respond immediately; the “fear” zone may persist until further positive triggers (e.g., regulatory clarity, large inflows, technical breakout).
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Cross‑asset linkages matter: Crypto does not operate in a vacuum—if broader risk assets (equities, commodities) remain under pressure, crypto may stay constrained.
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Look for catalyst confirmation: The trade deal is a positive, but what might push crypto out of its current range? Possibilities include institutional adoption, favourable regulation, or a sustained macro‑risk reduction.
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Momentum remains weak: Price‑wise, the major coins aren’t showing robust breakout patterns yet, which suggests an “accumulation” phase rather than an explosive uptrend.
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Risk remains high: Even as optimism builds incrementally, the market’s positioning and historical behavior around trade/regulatory news suggest caution is warranted.
6. Conclusion
In summary, while the U.S.–China trade agreement could be seen as a positive macroeconomic development, it has not yet shaken the pervasive caution in the crypto market. The sentiment remains firmly in the “Fear” camp. It suggests that although some structural noises are turning more positive, the market may still be waiting for stronger, more direct catalysts before turning bullish in earnest.
Investors may do well to monitor how this trade deal plays out over time, but also temper expectations: headline news alone does not guarantee a crypto market surge. The current mood suggests a patient build‑up rather than an immediate breakout.
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