Bitcoin is holding just below $80,000 amid Donald Trump‘s trip to China, where he is expected to meet with Xi Jinping. For the market, these talks now seem much more important than ordinary diplomacy.
The situation is already tense. Inflation in the U.S. remains high, bond yields are rising again, and the recent rise in bitcoin was mainly driven by leveraged traders, not strong spot demand.
That’s why the market is now clinging to literally any news from China. Any tough rhetoric, talk of sanctions, new restrictions, or supply problems can quickly hit risk assets.
For BTC, it’s not even about crypto itself. The market is more focused on the overall signal for the global economy.
If the meeting between Trump and Xi goes smoothly and without new conflict, it could calm investors a bit. Then bitcoin will have a chance to hold near $80,000 and maintain its current upward momentum.
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But if the talks stall or tensions rise again, the market could quickly change its mood. Especially considering that the current bitcoin rally is already starting to look less stable.
Trump’s Visit to China Becomes a Key Moment for the Market
The trip by Trump to Beijing is the first visit by a U.S. president to China since 2017. That’s why markets are now closely watching for any signals from Washington and Beijing.
The makeup of the delegation also says a lot. Along with Trump came Marco Rubio, Treasury Secretary Scott Bessent, and several major American business leaders.
Among them are Jensen Huang from NVIDIA, Elon Musk, and Tim Cook. All this once again shows how much U.S. and China relations are now tied to technology, AI, chip manufacturing, and global supply chains.
This is also important for the crypto market, even if not directly.
In recent months, bitcoin has increasingly moved in sync with other risk assets. Investors are looking not only at BTC itself, but also at the overall state of the global economy, liquidity, and market sentiment.
When geopolitical pressure eases and the market expects more dovish policies from central banks, bitcoin usually feels more confident. But as soon as tensions start to rise, money quickly leaves risk.
That’s why the talks between Trump and Xi are now very important for the market.
If the sides show a willingness to negotiate on trade, technology, or rare earth supplies, it could support interest in risk assets.
The market will also watch for any news on energy, agriculture, and major contracts. All of this directly affects concerns about a new trade war between the U.S. and China.
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But for bitcoin, the negative scenario looks much more dangerous.
If the talks again get stuck on Taiwan, sanctions, export restrictions, or military pressure in the region, investors may start to leave risk en masse.
In such a situation, money usually flows into the dollar and U.S. bonds.
For bitcoin, this will be another test. The market will again look to see if BTC can really act as a safe-haven asset, or if, during times of tension, investors still see it as just another risky instrument.
U.S. Producer Price Index. Source: ZeroHedge
These data only heightened concerns that business in the U.S. is still facing high cost pressures. As a result, companies may start passing these costs on to consumers.
The market reacted immediately. U.S. government bond yields rose again, and yields on 10-year U.S. bonds approached 4.4%.
At the same time, traders began to lower expectations for a quick easing of Fed policy.
This is a bad signal for risk assets. When bond yields rise, investors tend to move into safer fixed-income instruments.
Bitcoin usually performs worse during such periods. Unlike bonds, BTC does not provide fixed income, so interest in it largely depends on expectations of further price growth and liquidity inflows to the market.
Because of this, with high inflation and rising yields, investors become more cautious and less willing to enter risk assets without strong demand.
That’s why the U.S. and China meeting is now at the center of attention for the crypto market. Bitcoin is approaching these talks in a rather vulnerable state: inflation remains high, yields are rising, and some traders have already started to cut positions after the latest CPI data.
Leverage Makes Bitcoin’s Rise to $80,000 More Vulnerable
The situation around bitcoin now looks especially sensitive due to the large volume of leveraged trading. This can accelerate growth as well as sharply increase declines.
Analysts at Wintermute note that the recent jump in BTC above $80,000 was largely driven by derivatives. Over the month, open interest in the market grew from $48 billion to $58 billion.
This does not mean the growth was entirely artificial. But such a market structure makes the rally less stable.
When open interest grows too quickly, it often means traders are entering with leverage, not making long-term spot purchases of bitcoin.
In this situation, any positive news can sharply push the price up, especially if short sellers are being massively liquidated. But negative news works exactly the same in the opposite direction.
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At Wintermute, they specifically noted that closing shorts is not yet a sign of market confidence. A sustainable bull trend is usually not built on a short squeeze alone.
Sustained growth requires stable spot demand. So far, spot volumes are noticeably lagging behind the growth in leveraged trading.
The technical picture is also ambiguous. The relative strength index RSI has already approached the overbought zone, which may indicate an overheated market in the short term.
Additional risk is created by low BTC reserves on exchanges. On the one hand, limited supply supports the price. On the other, in a sharp sell-off, this can increase volatility.
In a thin market, even a small change in sentiment can sometimes lead to overly sharp price moves.
Because of this, the meeting between Trump and Xi Jinping is now especially important for bitcoin.
If the talks go smoothly, the current rally may still continue. But in the event of renewed tensions, the large amount of leverage could accelerate a sharp market pullback.
