- Crypto markets have entered a holding pattern, with Bitcoin near $108,164.
- Traders are awaiting a key US inflation (CPI) report due out on Friday.
- Hopes are rising for a de-escalation in the US-China trade war.
Cryptocurrency markets have entered a midweek holding pattern, with prices for Bitcoin and other major digital assets remaining relatively flat as traders brace for a pivotal US inflation report and look for signs of a de-escalation in the US-China trade dispute.
Bitcoin is trading around $108,164, up slightly from Monday but still down 2% for the week. Ether is changing hands near $3,815.
The stabilization reflects what the analytics firm QCP Capital has described as a “narrow-range equilibrium,” a period of calm before a potential storm.
A singular focus on the US inflation report
The market’s primary focus is now firmly on Friday’s Consumer Price Index (CPI) report, the only major US economic data release not delayed by the ongoing government shutdown.
In a recent note, QCP said the CPI is the “singular anchor” for policy expectations and broader risk sentiment.
A softer-than-expected reading, the firm noted, could “re-anchor the soft-landing trade” and provide support for Bitcoin as expectations for looser monetary policy improve.
Hopes are rising for a US-China détente
Adding to the market’s complex picture are the shifting dynamics of the US-China trade war.
Sentiment has improved after a weekend of whiplash, in which President Trump first threatened a massive new wave of tariffs only to later soften his stance, stating that “the USA wants to help China, not hurt it.”
This has led prediction markets to re-evaluate the risks. Traders on Polymarket now assign a 77% probability that a tariff agreement will be reached by November 10, while the odds of Trump’s threatened 100% tariffs taking effect have fallen to just 16 percent.
A cleaner slate after a brutal liquidation flush
This fragile calm comes just days after a brutal market-wide sell-off that saw nearly $20 billion in leveraged positions liquidated.
That massive flush has reset the market, creating a cleaner slate for macro traders as they head into the crucial CPI event.
The key question now is whether the “soft landing” narrative will be confirmed by Friday’s inflation data, or if the volatility that has defined the market in recent weeks will be reignited.
What to watch in the markets
For Bitcoin, analysts at Standard Chartered have noted that while sellers are limiting any immediate breakout potential, a dip below $100,000 could represent a “last chance to buy” before the next major leg higher.
For Ethereum, the picture is more divided.
A recent $650 million transfer by the Ethereum Foundation triggered a wave of profit-taking and liquidations, leaving analysts split between a potential breakout toward $5,000 and a possible slide toward $2,850 if the key support level at $3,470 fails to hold.
