Bitcoin rose on Monday, tracking a broader rally in risk-driven markets after the United States and China announced a framework agreement aimed at halting further escalation in their ongoing trade dispute.
Risk appetite was also boosted by moderate US inflation data, which raised optimism that the Federal Reserve will cut interest rates at its meeting later this week.
Bitcoin rose 3.5% to $115,504.0000 by 9:22 AM KSA time, breaking out of the $100,000-$110,000 trading range seen throughout most of October.
US-China trade optimism boosts cryptocurrencies
US and Chinese officials said over the weekend they had reached a framework for a trade agreement, which will be built upon when Presidents Donald Trump and Xi Jinping meet later this week.
The agreement covers a range of contentious trade issues, including China's recent rare earth export restrictions, rising US trade tariffs, and increased shipping fees between the two countries.
Trump and Xi are now scheduled to speak in South Korea later this week.
News of trade progress between the world's two largest economies boosted risk appetite, as markets bet against an immediate escalation in their ongoing trade dispute.
While cryptocurrencies aren't directly affected by trade disruptions, shifts in sentiment from any conflict tend to trigger market volatility. Previous concerns about US-China trade led to cryptocurrency markets trading lower for most of October.
Cryptocurrency Prices Today: Altcoins Rebound, Focus on Fed Rate Cut
Broader cryptocurrency prices followed Bitcoin higher on Monday, extending gains from the weekend's rally.
Ether, the world's second-largest cryptocurrency, jumped 7.5% to $4,240.35, while BNB rose 2.8% to $1,151.90.
Solana, Cardano, and XRP rose between 1.5% and 6%. Among meme coins, Dogecoin rose 6.3%, while $TRUMP added 4.2%.
Cryptocurrency prices rose late last week after US consumer inflation data for September came in slightly lower than expected.
These data have fueled growing confidence that the Federal Reserve will cut interest rates this week and offer a largely dovish outlook on further easing. The central bank is expected to cut interest rates by 25 basis points later this week, following a similar cut in September.
Markets are pricing in a near 100% chance of a 25 basis point cut, CME Fedwatch showed.
Low interest rates bode well for cryptocurrency markets, as they free up more liquidity to be deployed into speculative assets. Low interest rates have been a major driver of previous cryptocurrency rallies, most notably the 2021 bull run.
Beyond interest rates, a slate of major US tech earnings is set to drive market sentiment this week. Cryptocurrency prices tend to track US tech stocks, but were seen lagging behind equities in October.
