China and the United States have officially reached a trade agreement and want the markets to resume the upward trend during the next 90 days A rally that will surprise many After an unprecedented trade war in which not only tariffs between China and the United States skyrocketed but the possibility was raised that the conflict could escalate to new territory, even raising a military intervention. In recent days, the United States has announced several important trade agreements in which, in addition to the United Kingdom, they have agreed with China, agreeing to a significant reduction in tariffs for both the United States and China during the next 3 months, thus leaving the way clear for the markets to recover to November levels. In today's post, I am going to analyze this agreement in depth to see how it could condition the markets and especially Bitcoin, also raising the option that the Fed will imminently lower rates and we will also review other important news that could also affect the market in the short term.

Context of the trade agreement

The trade agreement between the United States and China Since the arrival of Trump, tariffs have destabilized world markets, causing great uncertainty and, above all, reviving the fear that the rise in prices will skyrocket again with inflation. A very delicate situation in which we have mainly had two protagonists, the United States and China. And when Trump took office, he made it clear that one of the main objectives was to reduce the trade deficit that the United States had, caused mainly by trade injustices and the tariffs that many countries charged on American products. Words that gave rise to what Trump called Liberation Day, an event that took place on April 2, 2025, in which the United States announced a new tariff policy that would include a 10% tariff on all imports except Canada and Mexico and additional specific tariffs for certain countries such as 54% on Chinese products, with the aim of correcting what it considered decades of very unfair trade relations. All this collapsed the markets and caused significant corrections in both the American stock market and Bitcoin and cryptocurrencies. And What's worse, it provoked a response from the Fed, with Jerome Powell stating that, in the wake of Trump's decisions, the risk of inflation was even greater and that they would be more cautious when lowering rates to prevent prices from skyrocketing.

Escalation of the conflict

But this would not end here and beyond that day the trade war and tensions between the United States and China continued to grow. In fact, they announced several increases in tariffs that reached 54% announcing on April 2 a 145% and against the United States they also exceeded 120% And the worst of all was not the impact on the markets with the tariffs causing very important corrections in companies like Apple Nvidia but as a result of the price increases a rather pessimistic scenario was raised with China announcing that they were willing to fight to the end and wanted everything that was necessary to counteract Trump's movements without even ruling out a military escalation of the conflict.

New temporary agreement

However, in recent days the situation has gradually stabilized and as a result of the first meetings between the United States and China and the best deal between the two, a first trade agreement has been reached, an agreement that is temporary and this is very important to keep in mind since, unlike the one that was closed last week with the United Kingdom, in this case there is a deadline of 90 days in which there are also several important details that must be taken into account. First of all, this agreement comes into force on May 14, that is, on Wednesday of this week. And in general terms, what it will imply is that for 90 days the United States will reduce its tariffs on Chinese products from 145% to 30%, while China will reduce theirs from 125% to 10%. An agreement that according to Trump will mean the restart of trade relations between both powers, allowing them to make a clean slate and thus reduce tensions between both countries.

On the other hand, this agreement has the main objective of allowing the United States and China to continue holding meetings and negotiations during the 90 days in order to reach a final agreement since in this case the commercial relations between China and the United States are quite complex and they must analyze many factors well before closing the final agreement. For this reason, they have decided to take a small pause of 90 days and in the meantime they continue working on a definitive and long-lasting agreement. However, there is still a long way to go and I consider that the next few weeks will be quite decisive with Trump's meeting with the Chinese president and new negotiations that could bring out more relevant information from the future trade agreement.

Impact on Bitcoin and cryptocurrencies

But it wouldn't end here And a few hours later during the morning of Monday the official announcement of the 90-day trade agreement between China and the United States would arrive, news that once again shot up the price of Bitcoin reaching $ 16,000 leaving a fairly important wick and even hopes that we could have a new historical maximum this week A movement that has been especially noticed in projects that are based in the United States with Ripple Cardano H Bar Solana and many others gaining strength However, throughout the day this euphoria has calmed down taking Bitcoin back to $ 103,000 and has also left a slight correction in the altcoins something similar to what we have seen in the American stock market that after the announcement the rise began to be reflected in the futures and throughout Monday the performance has been quite good with the SP500 rising more than 3% and recovering 5800 points which represents an increase of almost 800 points from the floor it marked at the beginning of April or with the NZAQ, which like the SP500 opened the week with more than a 3% rise, passing 20,800 points, which represents an increase of almost 4,000 from April levels. A brutal figure that demonstrates once again everything we have been commenting on week after week since the correction, how the markets have been recovering as the situation with the tariffs calmed down.

Market Outlook

Where is the market headed now? Once again, Bitcoin continues to surprise many and seeing the terrible situation it was going through in April with the trade war, the pressure from interest rates that would not fully drop, and the general disinterest of the retail sector and Wall Street investors made many fear the worst and sent Bitcoin to prices below $,000. However, it has managed to decouple itself from the American stock market and in recent weeks it has had a brutal performance. As for the possible evolution, from my point of view, this trade agreement is extremely important and will surely leave us a little calmer for 90 days in which at least the pressure of the trade war between the United States and China will be drastically reduced. In addition, this event also comes hand in hand with all the trade agreements that are about to be announced, which reflect how after the chaos and the moment of great changes with the arrival of Trump, the situation has finally begun to stabilize at an economic level, giving a small margin to investors and the markets.

Bills and institutional accumulation

On the other hand, we have several important events that could also be quite positive for Bitcoin, such as the approval of the reserve bill that involves the direct purchase of this asset. However, all this could change very soon, as Senator Cyntia Lumis announced a few hours ago, Trump is supporting her bill, which involves the direct purchase of 1 million Bitcoin by the United States over the next few years. A law that, if tested, would be brutal for Bitcoin since it would put a lot of pressure on other countries that would seek to follow this movement of the United States and start accumulating Bitcoin before it is too late. But this is not all, since seeing the approval in Arizona and all the bills that are on the verge of being officially approved, we could have a tsunami of capital injection into Bitcoin that would be decisive for the evolution of its price.

Arrival of the retail sector and final warning

Another important factor for a rebound in price is the final arrival of the retail sector, which in 2025 has been more absent than ever. However, as the economic situation improves and rate cuts and a possible change in monetary policy approach, this situation would give more flexibility to retail investors and could be reflected in a greater interest in riskier investments such as cryptocurrencies. In addition, if we add to this the fact that in the last rise we have had a small drop in dominance and a slight rebound in altcoins, this always helps to talk more about the sector and attract the attention of new investors. However, for the moment, although the situation looks quite good, we have to be patient since there are still several important open fronts that condition the price and could lead to volatility again, so I do not rule out a moment like the one we saw last Monday with corrections of 105 to 100,000 or even stronger to get rid of the weak hands and settle the prices, allowing those who are more constant and strong to end up achieving the best rewards.

Well, this post is coming to an end. I hope you find all this information useful, but be aware: I am not a financial advisor. All content provided on my blog is for educational purposes only, based on my own success and personal experience. Act responsibly and intelligently when spending and investing your money.