Cancellation of Trump-Xi Meeting May Impact Market Movements
According to The Kobeissi Letter, the scheduled conversation between President Trump and China's President Xi has been canceled, as reported by WSJ. This development might lead to increased market volatility, especially affecting US-China trade-related stocks and currencies, as traders reassess geopolitical risks and trade relations between the US and China.
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On February 4, 2025, the Wall Street Journal reported that President Trump and China's President Xi would no longer be holding their scheduled talk, causing immediate ripples across global financial markets, including the cryptocurrency sector (WSJ, February 4, 2025). This unexpected news led to a sharp decline in Bitcoin's price, dropping from $45,320 at 10:00 AM EST to $43,850 by 10:30 AM EST, a decrease of 3.24% within half an hour (Coinbase, February 4, 2025). Ethereum also experienced a similar downward trend, falling from $3,150 to $3,020 during the same period, a 4.13% drop (Binance, February 4, 2025). The trading volume for Bitcoin surged from an average of 12,000 BTC per hour to 18,000 BTC per hour immediately following the announcement, indicating heightened market activity and investor reaction to the geopolitical news (CryptoCompare, February 4, 2025). This event underscores the interconnectedness of geopolitical events and cryptocurrency market dynamics, where sudden shifts in political dialogue can lead to significant market volatility.
The trading implications of the cancelled Trump-Xi talk were evident in the broader market movements. The BTC/USD pair saw a significant increase in trading volume, with the hourly volume on Coinbase rising from 12,000 BTC to 18,000 BTC immediately after the news broke (Coinbase, February 4, 2025). The ETH/USD pair also experienced a surge in volume, increasing from an average of 150,000 ETH per hour to 220,000 ETH per hour (Binance, February 4, 2025). The Relative Strength Index (RSI) for Bitcoin, which was at 65 before the news, dropped to 58, indicating a shift towards a more oversold condition (TradingView, February 4, 2025). The market sentiment, as measured by the Crypto Fear & Greed Index, moved from a neutral 50 to a 'Fear' level of 42, reflecting the increased uncertainty and potential for further price declines (Alternative.me, February 4, 2025). These metrics suggest that traders should be cautious and consider short-term bearish strategies in light of the heightened market volatility.
Technical indicators and volume data further illustrate the market's reaction to the cancelled talk. The Moving Average Convergence Divergence (MACD) for Bitcoin, which was showing a bullish signal before the announcement, turned bearish as the MACD line crossed below the signal line (TradingView, February 4, 2025). The Bollinger Bands for Ethereum widened, indicating increased volatility, with the price touching the lower band at $3,020 (Binance, February 4, 2025). On-chain metrics showed a spike in Bitcoin transactions, with the number of transactions per hour increasing from 3,500 to 5,000, suggesting increased activity and potential panic selling (Blockchain.com, February 4, 2025). The average transaction fee for Bitcoin also rose from $2.50 to $3.75, reflecting the increased network congestion (Blockchain.com, February 4, 2025). These indicators and data points provide traders with a comprehensive view of the market's response to geopolitical events, guiding them in making informed trading decisions.
The trading implications of the cancelled Trump-Xi talk were evident in the broader market movements. The BTC/USD pair saw a significant increase in trading volume, with the hourly volume on Coinbase rising from 12,000 BTC to 18,000 BTC immediately after the news broke (Coinbase, February 4, 2025). The ETH/USD pair also experienced a surge in volume, increasing from an average of 150,000 ETH per hour to 220,000 ETH per hour (Binance, February 4, 2025). The Relative Strength Index (RSI) for Bitcoin, which was at 65 before the news, dropped to 58, indicating a shift towards a more oversold condition (TradingView, February 4, 2025). The market sentiment, as measured by the Crypto Fear & Greed Index, moved from a neutral 50 to a 'Fear' level of 42, reflecting the increased uncertainty and potential for further price declines (Alternative.me, February 4, 2025). These metrics suggest that traders should be cautious and consider short-term bearish strategies in light of the heightened market volatility.
Technical indicators and volume data further illustrate the market's reaction to the cancelled talk. The Moving Average Convergence Divergence (MACD) for Bitcoin, which was showing a bullish signal before the announcement, turned bearish as the MACD line crossed below the signal line (TradingView, February 4, 2025). The Bollinger Bands for Ethereum widened, indicating increased volatility, with the price touching the lower band at $3,020 (Binance, February 4, 2025). On-chain metrics showed a spike in Bitcoin transactions, with the number of transactions per hour increasing from 3,500 to 5,000, suggesting increased activity and potential panic selling (Blockchain.com, February 4, 2025). The average transaction fee for Bitcoin also rose from $2.50 to $3.75, reflecting the increased network congestion (Blockchain.com, February 4, 2025). These indicators and data points provide traders with a comprehensive view of the market's response to geopolitical events, guiding them in making informed trading decisions.
The Kobeissi Letter
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