Bitcoin drops ahead of China-U.S. trade talks
The world’s largest crypto extended losses into a second straight session after rebounding as much as $116,000
Bitcoin retreated on Wednesday, reversing more of a recent rebound as caution before high-level China-U.S. trade talks and Federal Reserve meeting kept traders largely averse towards crypto.
The world’s largest crypto also largely lagged an overnight bounce in U.S. technology stocks, with the country’s stock market rising to record highs on optimism over artificial intelligence. This optimism did not appear to have spilled over into crypto markets.
Bitcoin dropped 2.2% to $112,450 by 14:32 GMT. The world’s largest crypto extended losses into a second straight session after rebounding as much as $116,000.
Markets remained largely risk-averse before the conclusion of a two-day Fed meeting on Wednesday, where the central bank is widely expected to cut interest rates by 25 basis points.
But the rate cut was largely priced in in recent weeks, especially amid increasing signs of cooling inflation and labour market growth.
Caution before the meeting was over Fed Chair Jerome Powell’s outlook on monetary policy, with some analysts suggesting the Fed may signal reluctance to cut rates further.
Market focus was also on an upcoming meeting between Chinese President Xi Jinping and U.S. President Donald Trump. The two will meet in South Korea on Thursday and discuss a further de-escalation in their ongoing trade conflict.
Heightened China-U.S. trade tensions battered crypto markets in early-October, sparking a flash-crash in Bitcoin from which the crypto is still struggling to recover.
Crypto analytics firm Glassnode said on Wednesday that Bitcoin’s weekend rebound coincided with U.S. spot exchange-traded fund netflows turning positive.
But the firm also noted that ETF inflows remained well below levels seen at the start of major rallies, suggesting that Bitcoin still had more rangebound days in store.
Demand is recovering, but not at the intensity of recent rallies, Glassnode said.