The China-U.S. trade negotiations have made constructive progress, and the Bitcoin price is awaiting a clear statement from the Fed.

Despite the constructive progress made during the diplomatic talks between the US and China in Stockholm, the overall crypto market remains stagnant. Although the US and China have reached a preliminary agreement on suspending trade tariffs, no actual decisions have been made. At the same time, the market will focus on the Fed's interest rate decision, with expectations that a rate cut will provide more room for the rise of crypto assets.

The Link Between US-China Trade Negotiations and the Crypto Market

This Tuesday, despite progress made in diplomatic talks between the US and China in Stockholm, the overall crypto market has not shown any significant changes. According to reports, China's chief trade official Li Chenggang stated that both sides agreed to extend the tariff suspension deadline until after August 12. However, US Treasury Secretary Scott Bason clarified that while this extension was discussed, no final decision has been made.

Currently, the 90-day tariff suspension period is still in effect. The United States imposes a 30% tariff on Chinese imports, while China imposes a 10% tariff on American goods. Although these issues were not included in the formal agenda, U.S. President Trump hinted during talks that he might meet with Chinese President Xi Jinping, stating, "If Xi invites me, I might go to China."

Despite the positive atmosphere of the negotiations, the prospects for US-China trade remain full of variables, and no concrete solutions have been reached. This move may prompt the crypto market to follow more important upcoming events.

The Impact of Macroeconomic Dynamics on the Crypto Market

"This is a critical week for the macro economy," said Daniel Liu, CEO of Republic Technologies, in an interview with Decrypt. "A series of favorable macroeconomic news could trigger significant volatility in the crypto market."

After the talks in Stockholm, the price of Bitcoin experienced a slight correction. As of Tuesday evening, the price of Bitcoin was around $118,000, slightly lower than the $119,258 from the previous day (according to Gate data).

Recently, the impact of trade policies on risk assets has gradually emerged. The crypto market, as a high-beta asset of the US stock market, has shown volatility as Trump proposed and withdrew tariffs.

Economists believe that the large-scale tariffs proposed by the White House could exacerbate the Fed's pressure to address inflation, while inflation in the U.S. and globally has remained at high levels in recent years.

Market Focus on Fed Interest Rate Decision

Currently, all eyes are on the interest rate decision to be announced by the Fed on Wednesday at 2 PM (Eastern Time). According to CME's FedWatch tool, although the market probability of a rate cut in July is only 3.1%, the probability of a rate cut in September has risen to 65.4%.

Typically, a lower interest rate environment is favorable for the performance of risk assets, as low rates reduce borrowing costs, encouraging investors to allocate funds toward higher-yielding assets such as cryptocurrencies or stocks, rather than traditional low-yield options like bonds.

The market will closely follow the remarks of Fed Chairman Powell at the FOMC meeting. If he mentions "economic weakness," it may increase market expectations for a rate cut.

Conclusion: The current crypto market is still waiting for further signals on macroeconomic and monetary policy, especially the Fed's interest rate decision. As trade negotiations between the United States and China enter a critical phase, and the focus of the crypto market shifts to policy changes, market fluctuations may occur in the coming days. Investors should follow these macro dynamics and adjust their investment strategies flexibly.