Tariff Truce Ripple Effects on Crypto: Can Markets Find Relief from US-China Agreement?

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Summary:
A recent truce between the U.S. and China could impact the cryptocurrency market positively. With reports suggesting a pause on tariffs and rare-earth controls, the landscape for crypto trading appears to be shifting. This article explores how macroeconomic factors and micro signals in the crypto market may respond to these developments.

Key Takeaways:

The U.S.-China tariff truce is expected to lower dollar strength and stabilize global growth.
A pause on rare-earth controls could ease procurement issues for crypto infrastructure.
Monitoring stablecoin issuance and futures market movements can help indicate liquidity and market conditions.
If conditions remain stable, cryptocurrencies like BTC and ETH are poised for potential upward movements.

Macro Factors Impacting Crypto

The recent tariff truce between Washington and Beijing is changing the economic backdrop for trading this October. Bloomberg reported on October 30, 2025, that there will be a temporary cessation of tariffs, reduced rates to 10%, and a resumption of soybean purchases. Additionally, Reuters detailed that new rare-earth controls will be paused for a year, paired with renewed agricultural commitments, with official signatures anticipated soon.

Donald Trump labeled the recent summit as a success, stating, "If zero is bad and 10 is the best, I would rate the meeting at a 12." On the other hand, Xinhua highlighted Xi Jinping’s call for more dialogues, aiming for “tangible results” through continued collaboration.

Effects on Market Dynamics

Tariff reductions typically alleviate dollar dominance and encourage global economic growth, leading to positive performances in risk assets including cryptocurrencies. Since early October, the crypto market has mirrored these economic changes, stabilizing when tensions receded and showing volatility around critical news updates.

The pause on rare-earth tariffs reduces uncertainties in planning for essential equipment and data centers, which are crucial for crypto validators and service providers. This gives operators the much-needed time to make purchases and manage energy requirements without sudden financial shocks.

Moreover, the truce minimizes the likelihood of abrupt export or shipping restrictions, thus stabilizing the dollar's role in international transactions. Clarity in logistics allows treasury teams to reduce their precautionary reserves, which in turn minimizes forced selling during high-activity periods.

Finally, a controlled policy pathway lowers the chances of unexpected events over the weekends. As negotiations progress with documented agreements, the overall macroeconomic risk diminishes, allowing cryptocurrencies to react more to actual cash demand rather than just defensive strategies.

Key Micro Indicators to Monitor

During periods of policy uncertainty, stablecoin issuance often stagnates or decreases. An increase in stablecoin supply may indicate fresh liquidity which could support active trading. This is different from short-term, leverage-based increases that can quickly reverse.

Additionally, the relationship between spot and futures contracts, along with funding rates, is essential to observe. A shift toward a neutral state typically indicates an increase in cash exposure rather than reliance on high leverage, positioning the market for more sustained growth rather than temporary spikes and dips.

When these micro signals align positively, price corrections tend to hold because market depth improves while cash demand effectively absorbs the available supply. However, if they diverge, relief from headlines can diminish quickly, resulting in weakened bids and swift pullbacks in response to U.S. economic data or policy changes.

One-Month Outlook Post-Truce

If the scheduled soybean purchases and the pause on rare-earth tariffs proceed as expected, we can anticipate reduced settlement frictions in the market. Periods of calmer policy discussions often lead to shorter redemption times and quicker adjustments in pricing, especially following strong stock market performances.

However, policy tranquility does not always translate to immediate capital inflows. A resurgence of technology regulations, currency instability, or trade disputes could create premiums and strain market depth, replicating the large-scale sell-offs and sluggish recoveries observed in mid-October.

Overall, the current trend appears to lean toward market stabilization rather than disruption. Should market conditions improve—leading to stable supply of stablecoins and a settled basis—cryptocurrencies like BTC and ETH may test new price highs, with SOL and XRP often providing higher-volatility support.