Bitcoin’s price climbed above $115,000 on Monday, fueled by growing optimism that the Federal Reserve will soon cut interest rates and by renewed hope of a trade breakthrough between the United States and China.
The world’s largest cryptocurrency rose 2.6% in the past 24 hours, according to CoinDesk data, recovering from its recent pullback earlier this month when it hit a record high above $124,000 before geopolitical tensions between Washington and Beijing cooled investor enthusiasm.
Traders Eye Fed Policy Shift
Markets are now pricing in a near certainty of a quarter-point rate cut when the Federal Reserve meets this week. The expectation gained strength after the September Consumer Price Index (CPI) report—delayed due to a government data system outage showed inflation at 3% last month.
Lower borrowing costs generally benefit speculative and risk assets like stocks and cryptocurrencies, which can appear more attractive relative to government bonds or savings accounts. Rate cuts also tend to weaken the U.S. dollar, a dynamic that historically supports higher crypto valuations since most digital assets are priced in dollars.
“Crypto markets are clearly front-running the Fed,” said one analyst from crypto trading platform eToro. “When rate cuts look imminent, liquidity flows back into digital assets—especially Bitcoin and Ethereum.”
Hope Builds for a U.S.–China Trade Breakthrough
Investor optimism was also lifted by signs that President Donald Trump and Chinese President Xi Jinping could strike a more stable trade framework later this week. Both leaders are expected to meet at a high-profile summit where trade and technology restrictions are at the top of the agenda.
The prospect of easing trade tensions comes after months of volatility driven by tariffs, semiconductor bans, and concerns over the global supply chain. A more cooperative tone between the two economic superpowers could improve global risk sentiment, a major tailwind for cryptocurrencies and emerging markets.
“Any thaw in U.S.–China relations is bullish for Bitcoin,” said Marcus Sotiriou, market analyst at GlobalBlock. “When investors believe global trade is back on track, they feel more confident holding alternative assets.”
Altcoins and Crypto Stocks Join the Rally
The broader crypto market followed Bitcoin’s lead. Ethereum (ETH) jumped 4.7%, trading near $3,850, while Solana (SOL) added 2.9%. Dogecoin (DOGE), the popular meme token that often mirrors market sentiment, gained 2.0%.
In equity markets, crypto-linked stocks also advanced. MicroStrategy (MSTR)—recently rebranded as Strategy and still the largest corporate holder of Bitcoin—rose 4.2% on Monday. Coinbase Global (COIN), the leading U.S.-based crypto exchange, climbed 2.9% as investors bet on higher trading volumes if Bitcoin continues to rally.
Why It Matters for Investors
If the Federal Reserve confirms a pivot toward lower rates, it could signal the start of a new liquidity cycle—a critical factor for high-growth sectors including crypto, tech, and AI. Historically, Bitcoin rallies have often coincided with periods of monetary easing and a weaker dollar.
A potential U.S.–China trade truce would add another tailwind by reducing uncertainty across global markets, which could attract institutional investors back into digital assets.
Still, analysts caution that volatility remains a defining feature of the crypto landscape. “Even with favorable macro conditions, Bitcoin doesn’t move in a straight line,” warned CoinShares head of research James Butterfill. “Investors should be prepared for sharp corrections along the way.”
New Highs On the Horizon?
With Bitcoin trading above $115,000 and the possibility of new highs on the horizon, market sentiment appears to be shifting decisively bullish again. Ethereum’s outperformance, driven by renewed enthusiasm for decentralized finance (DeFi) and ETF speculation adds further momentum to the space.
If rate cuts are confirmed and trade negotiations progress smoothly, digital assets could see one of their strongest quarters since early 2021. But if inflation reaccelerates or trade talks falter, this optimism could evaporate just as quickly.
For now, though, traders are betting that the perfect mix of monetary easing and diplomatic progress could keep the crypto market’s winning streak alive.
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