Bitcoin surges above $110,000 as President Trump eases China trade rhetoric and Federal Reserve rate cut expectations fuel a major crypto rebound.
Bitcoin Rebounds Above $110K: What’s Driving the Surge?
Bitcoin made a dramatic comeback above $110,000 on Monday, October 20, 2025, as reassuring signals from President Donald Trump over U.S.-China trade tensions and growing expectations of a Federal Reserve rate cut revived investor appetite for risk assets — particularly cryptocurrencies.
The world’s largest cryptocurrency jumped 3.5% to $110,608, extending its weekend recovery after dipping to $103,000 last week following renewed tariff threats. Ethereum also joined the rally, climbing past the $4,000 mark, while total crypto market capitalization rose toward $3.8 trillion, recovering from last week’s low of $3.4 trillion.
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Crypto Markets Bounce After Major Selloff
The rebound comes just days after a $19 billion leveraged liquidation event on October 10, triggered by Trump’s surprise announcement of 100% tariffs on Chinese imports. The move spooked global markets and triggered a steep selloff in digital assets.
However, the mood shifted swiftly over the weekend as signs emerged of a potential diplomatic thaw between Washington and Beijing.
Trump Signals Softer Tone Ahead of U.S.-China Summit
Addressing reporters ahead of his upcoming summit with Chinese President Xi Jinping at the end of October, Trump struck a more conciliatory tone, calling a prolonged trade war “not sustainable.”
“I don’t want to hurt China. I want to help China. But they have to give us things too,” Trump said, hinting at renewed negotiations over U.S. demands related to agricultural exports, rare earth minerals, and fentanyl control measures.
In a parallel statement, Treasury Secretary Scott Bessent confirmed that high-level trade discussions with Chinese officials will resume this week. The announcement injected optimism into global equity and crypto markets, suggesting a possible de-escalation in trade tensions.
Federal Reserve Rate Cut Bets Add Fuel to the Rally
Adding to the bullish momentum, investors are betting heavily on an interest rate cut at the October 28–29 Federal Open Market Committee (FOMC) meeting. Market data indicates a 99% probability of a 25 basis point cut, with an additional reduction expected by December if inflation and labor data continue to weaken.
Lower interest rates typically benefit Bitcoin and other non-yielding assets, making them more attractive than savings accounts or government bonds.
“For crypto, which remains highly sensitive to real-rate expectations and liquidity, this represents a meaningful tailwind,” said Joel Kruger, crypto strategist at LMAX Group.
Analyst Outlook: Key Levels and Potential Risks
Despite the sharp rebound, analysts warn that volatility remains elevated. Bitcoin is still about 12% below its October all-time high of $125,000, and traders are closely watching the $110,000 level as a crucial psychological and technical point.
A sustained move above $110K could pave the way for a retest of record highs, but a break below may trigger another round of liquidations.
Technical analysts identify $108,500 as near-term support and $112,000–$115,000 as resistance zones to watch in the coming days.
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What to Watch Next
Markets now turn their attention to two critical events that could shape Bitcoin’s next move:
- Trump–Xi Summit (Late October): Any progress on trade or tariff relief could further boost investor sentiment.
- U.S. Inflation Data (Friday): A softer reading would reinforce expectations for aggressive Fed easing, potentially extending the crypto rally.
The Bigger Picture
Bitcoin’s resurgence above $110,000 underscores the interplay between geopolitics and monetary policy in driving digital asset markets. As central banks signal easing and global trade tensions show signs of cooling, cryptocurrencies continue to emerge as a barometer of global risk sentiment.
With the Federal Reserve poised to cut rates and the White House signaling diplomatic flexibility, investors may see Bitcoin’s next leg higher as more than just a technical bounce — it could mark the start of a new bullish phase heading into November.