Cryptocurrencies Did Not Rally After the U.S.-China Trade Deal. Is the Tariff Agreement Bullish or Bearish?

TradingKey – Following the conclusion of U.S.-China tariff negotiations, both countries jointly announced on May 12 a temporary 90-day reduction in tariffs, with cuts far exceeding market expectations. While risk assets such as U.S. equity futures and oil prices surged in response, cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Dogecoin (DOGE) reacted with declines.

In the two hours following the release of the joint statement, Nasdaq futures jumped 3%, and Hong Kong stocks rallied sharply to gains of up to 6%. However, major crypto assets remained muted or moved lower.

At the time of writing, Bitcoin had edged downward, Ethereum was down over 1.5%, Dogecoin fell more than 2.5%, and other altcoins such as SOL also experienced losses. Notably, just days before the official talks began, Bitcoin had broken above $100,000 for the first time in months, while Ethereum surged nearly 40% in a single week.

A cryptocurrency trader commented that if trade uncertainty had been a driver of Bitcoin’s rally, then the announcement of a trade deal could logically trigger profit-taking or a pause in upward momentum.

Cryptocurrencies were not the only asset class to fall — gold, typically viewed as a traditional safe-haven asset, also took a hit, dropping over 3% in a short period after the announcement.

Some analysts pointed out that the synchronized price action between Bitcoin and gold might reflect growing investor perception of Bitcoin as a hedge against macroeconomic instability.

Another explanation for the short-term dip in crypto prices is that the recent rally had been overly optimistic, prompting investors to take profits or reallocate capital toward equities and other risk-on assets.

However, as markets digested the implications of the U.S.-China tariff agreement, cryptocurrency prices later rebounded, with both Bitcoin and Ethereum turning positive again.

From a technical perspective, some analysts suggest that bitcoin is currently forming a bullish flag pattern on the weekly chart, signaling the continuation of an uptrend. The next major resistance level is seen around $150,000, indicating that this pullback may be nothing more than a healthy correction in a broader bull cycle.