The Trump-Xi meeting confirmed on October 31! Trump’s tariff war eases, but the Crypto Assets market remains in "extreme fear".

U.S. President Trump confirmed that he will meet with Chinese national leaders at the Asia-Pacific Economic Cooperation (APEC) summit in Seoul, South Korea, on October 31. Trump stated that the meeting will take place in South Korea. After the confirmation of the Trump-Xi meeting, the price of Bitcoin rose by about 2%, while Ethereum and Solana briefly surged but then retraced.

After the Trump-Xi meeting confirmation, Trump softens his stance towards China

(Source: Fox News)

Trump's evaluation of China's national leader significantly softened on Sunday, which is the most important signal after the Xi-Trump meeting. Trump stated: “(The national leader of China) is a very strong leader, a very remarkable person. You can look at what he has done, and see the ups and downs of his life. It's a wonderful story that could be made into a great movie. I believe that we will get along well with China, but we must reach a fair agreement. It must be fair.”

This statement sharply contrasts with Trump's earlier hardline stance against China. Just two weeks ago, Trump announced a 100% tariff on Chinese imports and explicitly stated, “We are now in a trade war.” The shift from “trade war” to “we will get along very well” suggests that Trump may be paving the way for negotiations rather than continuing to escalate the confrontation.

The choice of venue and timing for the Xi-Trump meeting also carries symbolic significance. The APEC summit is the most important multilateral economic cooperation platform in the Asia-Pacific region, and meeting in this context demonstrates both parties' willingness to showcase cooperation on the international stage. With only two weeks remaining until October 31, this urgent timetable suggests that both sides have had preliminary contacts and reached some form of understanding.

Trump previously stated that there was “no reason” to meet with Chinese national leaders at the APEC summit in South Korea, and then announced increased trade tariffs on China, leading the cryptocurrency market into a vicious cycle, with some altcoins losing 99% of their value. Such policy swings are not uncommon in Trump's governance style, but each turn has a dramatic impact on the market. If the current softened attitude can continue until October 31 and some trade agreement is reached, it would be a significant boost for the crypto market.

The easing of tensions and the increasing possibility of a trade agreement between China and the United States are positive price catalysts for cryptocurrencies. The core issue of the trade war is that tariffs have led to a slowdown in global economic growth, rising inflationary pressures, and tightening liquidity in risk assets. If a meeting between Trump and Xi can lower tariffs or reach a phased agreement, it would eliminate the greatest source of uncertainty in the market, and risk appetite may rebound quickly.

The most severe liquidation event in history has erupted, and the fear index has dropped to 22

Trump's social media post triggered nearly $20 billion in liquidations in the crypto derivatives market, marking the most severe crypto liquidation event in history. A perfect storm of leverage, insufficient liquidity, and excessive risk exacerbated the situation. When Trump announced a 100% tariff on China, market sentiment reversed instantly, leading to the forced liquidation of a large number of highly leveraged long positions. These forced sell-offs further depressed prices, triggering more liquidations and creating a vicious cycle.

After the historic cryptocurrency market crash and investors' concerns over the prolonged trade war between China and the United States, market sentiment has fallen to its lowest point in six months. The cryptocurrency Fear and Greed Index dropped to a low of 22 on Friday, indicating “extreme fear” in the cryptocurrency market and caution among investors. This index is calculated based on multiple factors, including volatility (25%), trading volume (25%), social media sentiment (15%), surveys (15%), Bitcoin market dominance (10%), and Google Trends data (10%).

What is the concept of a reading of 22? This is close to the extreme levels during the 2022 Luna crash and the FTX bankruptcy, when the index fell below 20. Historical experience shows that when the fear index falls below 25, the market is often at the bottom area, with a probability of more than 70% for price rebounds in the subsequent 30 days. This statistical pattern provides technical support for the rebound after the Trump-Xi meeting.

However, extreme fear also reflects real market trauma. Many investors suffered heavy losses in the $20 billion liquidation, and restoring confidence will take time. Even if the Trump-Xi meeting brings positive news, the market may still need weeks to fully digest the panic. The painful experiences of the past two weeks will make investors more cautious when re-entering the market, which may limit the speed and extent of the rebound.

However, analysts from the Kobeissi Letter predict that the market downturn will last for a very short time due to technical factors, and they state that the long-term bullish trend remains intact. This judgment is based on the structural support for Bitcoin still being strong, ongoing institutional investment, and the historical pattern of strong rebounds following periods of extreme fear.

Bitcoin rebounds over the weekend, market slightly warms up

(Source: Trading View)

Bitcoin prices surged by about 2% on Sunday following Trump's comments, and BTC wasn't the only currency to see a slight increase. The cryptocurrency market saw a widespread rise, with Ethereum and BNB each recording an approximate 3.5% pump, while Solana has risen nearly 4% according to TradingView data as of the time of this writing. This broad rebound indicates a positive market interpretation of the news from the Trump-Xi meeting.

Bitcoin rebounded from a low of around $105,000 on Friday to $107,685 on Sunday, recovering some lost ground. Technically, $107,000 is a key support level, and if it holds, a rebound to $110,000 is feasible. If the Trump-Xi meeting brings substantial breakthroughs, such as lowering tariffs or establishing a trade negotiation framework, Bitcoin may challenge the resistance zone of $114,000 to $117,000.

Ethereum and BNB's 3.5% pump is slightly higher than Bitcoin, indicating a recovery in risk appetite. When investor sentiment improves, funds often shift from relatively stable assets like Bitcoin to more volatile altcoins in search of higher returns. Solana's 4% pump leads among mainstream coins, reflecting its resilience as a high-beta asset when the market warms up.

However, this rebound is still in its early stages, and the trading volume has not significantly increased, indicating that buyers are cautious. Many investors may adopt a wait-and-see attitude, deciding whether to enter the market heavily after the actual outcome of the Trump-Xi meeting. In the two weeks before October 31, the market may maintain a volatile pattern, with traders closely monitoring the negotiation signals released by both sides.

If the Trump-Xi meeting reaches an agreement, the crypto market may welcome a “fear retreat” trend, with funds quickly flowing back to drive prices beyond the current range. Conversely, if the meeting yields no results or even collapses, the market may test the lows again, and the fear index may fall below 20, entering extreme territory.