Daily Crypto Signals: Bitcoin and Ethereum Rally as US-China Trade Tensions Ease, Market Recovers from Flash Crash
After a severe Friday flash crash triggered by Trump's tariff announcement wiped out nearly $500 billion in crypto value, Bitcoin and Ether
Quick overview
- After a significant flash crash triggered by Trump's tariff announcement, Bitcoin and Ethereum led a market recovery as US-China trade tensions eased.
- Bitcoin is testing a bullish golden cross pattern, historically linked to major price rallies, while Ethereum has stabilized above $4,100 and aims for $4,500.
- Despite recent volatility, analysts remain optimistic about Bitcoin's potential for a bull run, with predictions of reaching $200,000 by the end of 2025.
- Ethereum's strong performance during the market turmoil highlights its appeal to institutional investors, supported by robust derivatives markets.
After a severe Friday flash crash triggered by Trump’s tariff announcement wiped out nearly $500 billion in crypto value, Bitcoin BTC/USD and Ethereum ETH/USD led a strong market recovery as US-China trade tensions eased. Bitcoin is now retesting a bullish golden cross pattern that historically preceded massive rallies, while Ethereum has stabilized above $4,100 and shows signs of heading toward the $4,500 resistance level.
Crypto Market Developments
After a flash crash on Friday that dropped Bitcoin from over $121,560 to below $103,000, the crypto markets were very volatile over the weekend. The first drop happened when US President Donald Trump said he would place a 100% tariff on China. This was part of his plan to stop the sale of rare earth minerals that are used to make computer chips. However, technical problems on major exchanges made the drop worse. For example, Binance’s front-end briefly showed $0 prices on multiple cryptocurrencies, and the USDe synthetic dollar lost its peg because of a problem with an internal oracle.
When Trump said on Sunday that he didn’t want “depression for his country” and told the markets that “it will all be fine,” the market started to rebound. At the same time, China’s Ministry of Commerce said it was open to talk about trade issues such export curbs on rare earths. This diplomatic gesture turned around the drop in prices over the weekend, and by Sunday, the total value of all cryptocurrencies had risen above $4 trillion. Analysts think that more signals of softening trade tensions could push global markets farther higher in the next week.
According to the analytics company Santiment, retail traders first blamed the drop on Trump’s announcement of tariffs. But analysts said this was “typical rationalization behavior,” where traders look for one incident to explain why the market is going down. They said that the truth was more complicated than just the tariffs. They said that a number of problems with the structure of the market were to blame for the wave of liquidations throughout derivatives markets.
Bitcoin Testing Golden Cross Once More?
Bitcoin (BTC) is currently testing the “golden cross” again. This is a traditionally bullish technical pattern that happens when a short-term moving average crosses above a long-term moving average. Mister Crypto, a crypto expert, says that Bitcoin’s last two golden crosses led to huge gains—2,200% in 2017 and 1,190% in 2020. At the time of writing, BTC was trading between $110,000 and $115,000. If it breaks over this important level, analysts say it might start what they call another “parabolic move” in the next few weeks. Mister Crypto said, “The setup looks incredibly strong,” and a break may “absolutely explode” the price of Bitcoin.
Bitcoin is still down about 4.9% from the collapse lows and 8.8% from last Monday’s peak of $126,080, even if it has recovered. Still, the mood among most prominent market players is positive, with a number of traders and analysts saying they are sure that Bitcoin’s bull market will continue. Samson Mow, the founder of Jan3, said, “It’s time for Bitcoin’s next leg up.” Trader Alex Becker said there is a “very high chance” that this is the start of the bull run. Some analysts, like “Mac,” lowered their short-term predictions, saying that there would be “a little more upward chop” over the following week before a big, long-lasting surge. However, the risk-to-reward arrangement is still good. A lot of people think that Bitcoin might still hit $200,000 by the end of 2025.
Ethereum Set to Rebound to $4,500?
Ethereum held up well during the fall and recovery, doing much better than most altcoins and solidifying its position as the best choice for institutional capital. ETH saw a sudden drop of 20.7% on Friday, but by Sunday it had climbed back up to $4,100. Analysts say that the next big barrier mark is $4,500. This outperformance is very different from what other altcoins did, since they all saw far bigger intraday declines. For example, Solana fell 84%, Avalanche fell 70%, and Cardano fell 66% from their peaks during the chaos.
Even though there was a lot of stress in the market, Ether’s derivatives markets were starting to seem regular again. The $3.82 billion in leveraged long liquidations messed with perpetual futures, with funding rates dropping to -14%, which meant that short traders had to pay to keep their positions, which was not a good sign for the market. But ETH monthly futures swiftly got back to the minimum 5% premium needed for a balanced market in less than two hours. This suggests that the liquidation cascade was a short-term shock rather than a long-term change in attitude.
The ETH options markets on Deribit were in good shape, with typical trading volumes and balanced put-to-call ratios. This showed that traders were confident in Ether’s medium-term prognosis. Ether’s robustness during times of turbulence is backed by its $23.5 billion in spot exchange-traded funds and $15.5 billion in open interest on options markets. This gives it institutional-grade liquidity and stability that sets it apart from its competitors. As trust in derivatives structures slowly comes back, Ether’s outlook stays positive for a rebound to the $4,500 resistance level.
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