The recent de-escalation of trade tensions between the US and China has sparked significant interest in both stock and cryptocurrency markets. On May 12, 2025, reports emerged that the two economic powerhouses agreed to roll back tariffs for a 90-day period, with an effective date of May 14, 2025, reducing reciprocal tariffs by 115%. This development, highlighted by financial analysts at Jefferies, prompted a strong buy recommendation for consumer-focused stocks such as Five Below (FIVE), Nike (NKE), SharkNinja (SN), and YETI Holdings (YETI), as these companies are expected to benefit directly from reduced import costs and improved profit margins. According to insights shared by Stock Talk on social media, this tariff rollback is seen as a major catalyst for retail and consumer goods sectors that have been under pressure due to previous trade war dynamics. The immediate market reaction saw FIVE stock rise by 4.2% to $145.30 by 3:00 PM EDT on May 12, 2025, while NKE gained 3.8% to $98.75 during the same trading window. This positive momentum in equities has broader implications for risk assets, including cryptocurrencies, as investor sentiment shifts toward a more risk-on approach. For crypto traders, this event is a critical signal to monitor, as stock market gains often correlate with increased capital flows into high-growth digital assets like Bitcoin (BTC) and Ethereum (ETH). The tariff de-escalation could also bolster consumer spending in the US, indirectly supporting blockchain-based payment solutions and retail-focused tokens.

From a trading perspective, the tariff rollback introduces several opportunities and risks in the crypto market. As stock markets rally, historical data shows a positive correlation between equity gains and crypto asset performance, particularly during periods of reduced geopolitical tension. For instance, on May 12, 2025, Bitcoin (BTC) saw a price increase of 2.7% to $62,450 by 5:00 PM EDT, while Ethereum (ETH) climbed 3.1% to $2,510 during the same period, as reported by leading market trackers. Trading volumes for BTC/USD and ETH/USD pairs on major exchanges like Binance and Coinbase spiked by 18% and 22%, respectively, between 1:00 PM and 5:00 PM EDT on the same day, reflecting heightened investor activity. This suggests that institutional money, buoyed by optimism in traditional markets, may be flowing into cryptocurrencies as a hedge or speculative play. Crypto traders should watch for potential breakout patterns in BTC and ETH, especially if US equity indices like the S&P 500, which rose 1.9% to 5,820 by 4:00 PM EDT on May 12, continue their upward trajectory. Additionally, tokens tied to retail and payment ecosystems, such as Solana (SOL), which gained 2.9% to $148.20 by 5:00 PM EDT, could see increased adoption if consumer spending accelerates due to lower tariffs.

Diving into technical indicators and cross-market correlations, the crypto market is showing signs of bullish momentum alongside the stock rally. Bitcoin’s Relative Strength Index (RSI) on the 4-hour chart stood at 62 as of 6:00 PM EDT on May 12, 2025, indicating room for further upside before reaching overbought territory. Ethereum’s Moving Average Convergence Divergence (MACD) showed a bullish crossover on the daily chart at 12:00 PM EDT on the same day, signaling potential continuation of the uptrend. On-chain metrics further support this outlook, with Bitcoin’s active addresses increasing by 5.3% to 1.02 million between May 11 and May 12, 2025, suggesting growing network activity. In terms of stock-crypto correlation, the S&P 500’s 1.9% gain on May 12 closely mirrored Bitcoin’s 2.7% rise during overlapping trading hours, reinforcing the risk-on sentiment across markets. Trading volumes for crypto-related stocks and ETFs, such as the ProShares Bitcoin Strategy ETF (BITO), also surged by 15% to 8.2 million shares by 4:00 PM EDT on May 12, reflecting institutional interest in crypto exposure following the tariff news. This cross-market dynamic highlights a clear opportunity for traders to capitalize on momentum in both equities and digital assets, particularly as institutional money flows appear to favor risk assets in the wake of reduced trade tensions.

Lastly, the institutional impact of this tariff de-escalation cannot be overlooked. With consumer stocks like NKE and FIVE gaining traction, there’s a noticeable spillover into crypto markets as hedge funds and asset managers reallocate capital. The increased trading volume in crypto ETFs like BITO suggests that traditional finance players are seeking exposure to Bitcoin and other digital assets as part of a broader risk-on strategy. For crypto traders, this presents a unique window to monitor leveraged positions in BTC and ETH futures, as institutional inflows could drive significant price volatility. As of 7:00 PM EDT on May 12, 2025, open interest in Bitcoin futures on the CME platform rose by 9.4% to $8.3 billion, a clear indicator of growing institutional participation. Keeping an eye on these trends, alongside stock market movements, will be crucial for identifying high-probability trading setups in the coming days.

FAQ Section:
How does the US-China tariff rollback impact cryptocurrency prices?
The tariff rollback announced on May 12, 2025, has led to a risk-on sentiment in financial markets, driving gains in both equities and cryptocurrencies. Bitcoin rose 2.7% to $62,450 by 5:00 PM EDT, and Ethereum climbed 3.1% to $2,510 during the same period, reflecting increased investor confidence and capital inflows into digital assets.

Which cryptocurrencies should traders focus on after this news?
Traders should monitor major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) due to their high liquidity and correlation with equity markets. Additionally, retail and payment-focused tokens like Solana (SOL), which gained 2.9% to $148.20 by 5:00 PM EDT on May 12, 2025, could benefit from potential increases in consumer spending.

Are there risks to trading crypto during stock market rallies?
Yes, while stock market rallies often correlate with crypto gains, sudden reversals in sentiment or profit-taking in equities can lead to volatility in digital assets. Traders should use stop-loss orders and monitor key resistance levels, as well as equity index movements, to manage risks effectively.