Crypto markets entered the week cautiously optimistic, with traders betting that a Trump–Xi trade deal and a dovish shift from the Federal Reserve could revive October’s fading momentum. However, lingering risks from rare-earth export restrictions and the U.S. government shutdown are keeping investors on edge.
Bitcoin traded around $114,000, while Ethereum held near $4,120 early Tuesday in Hong Kong, as markets braced for one of the year’s most critical stretches — featuring U.S.–China negotiations, a Fed policy announcement, and a wave of major tech earnings.
Prediction markets on Polymarket indicate strong optimism for progress, assigning a 92% probability that Washington and Beijing will sign a tariff agreement by November 10, following constructive weekend talks in Malaysia. The framework could be finalized when Donald Trump meets Xi Jinping at Thursday’s APEC summit in Seoul, a scenario that has already lifted sentiment across risk assets.
Bitcoin briefly surged to $116,200 on Sunday before easing, while crypto mining and AI-related stocks — including Hut 8, CleanSpark, and IREN — rose between 2% and 3%.
Yet, confidence remains mixed. Another Polymarket contract gives just a 36% chance that China will lift its rare-earth export ban by year-end, highlighting expectations of short-term cooperation on tariffs but persistent rivalry over strategic resources.
That divergence suggests markets view the potential summit outcome as a political boost rather than a structural breakthrough.
In a market note, Singapore’s QCP Capital said the Trump–Xi outcome “could have greater near-term influence on crypto than the Fed’s rate decision.” The firm pointed to speculation that the Fed may soon end its three-year quantitative tightening cycle, a move that would reintroduce liquidity into global markets.
“Any sign that such a shift is near would re-anchor liquidity expectations,” QCP wrote.
Despite improved sentiment, Bitcoin remains flat for the month, threatening to break its seven-year ‘Uptober’ winning streak.
The 26-day U.S. government shutdown continues to cloud the economic outlook, QCP added, restricting data releases that could guide the Fed’s policy path. Meanwhile, investors are watching earnings from Microsoft, Apple, Amazon, Meta, and Google for insight into consumer resilience.
In derivatives, BTC and ETH risk reversals have turned neutral, suggesting traders are less defensive after weeks of downside hedging.
Still, QCP warned that a sustained recovery will likely require Bitcoin to close above $116,000 by month-end. With politics, policy, and liquidity all converging, the coming days could decide whether crypto’s ‘Uptober’ streak extends or ends.
Market Snapshot
- Bitcoin (BTC): Briefly reached $116,200 before retreating to $114,000, consolidating ahead of key macro events.
- Ethereum (ETH): Steady near $4,120, mirroring Bitcoin’s pause as investors await policy clarity.
- Gold: Recovered to $4,021 per ounce after dipping below $4,000 Monday, with trade optimism and rising yields limiting safe-haven demand.
- Nikkei 225: Japan’s benchmark index fell 0.38%, while Topix slipped 0.49%, as traders awaited Trump’s first meeting with Japan’s new Prime Minister Sanae Takaichi.
