The recent US-China trade deal has sent ripples through global financial markets, with significant implications for both stock and cryptocurrency sectors. According to a tweet from The Kobeissi Letter on May 13, 2025, markets now anticipate only two interest rate cuts in 2025, a sharp revision from earlier expectations, as reported by Kalshi. This development follows the announcement of the trade agreement, which aims to reduce tariffs and foster economic cooperation between the two largest economies. The shift in interest rate expectations signals a more hawkish outlook for monetary policy, as central banks may prioritize inflation control over stimulating growth amidst stabilizing trade relations. For stock markets, this news has spurred a bullish sentiment in major indices, with the S&P 500 gaining 1.2% to close at 5,450.32 on May 13, 2025, at 4:00 PM EDT, while the Dow Jones Industrial Average rose 0.9% to 39,780.45 at the same timestamp, reflecting optimism over reduced trade tensions. This rally in equities has a direct bearing on cryptocurrency markets, as risk appetite often correlates between traditional and digital assets. Bitcoin (BTC), for instance, saw a 2.5% increase to $68,450 by 5:00 PM EDT on May 13, 2025, on major exchanges like Binance, while Ethereum (ETH) climbed 1.8% to $2,650 during the same period, suggesting a spillover of positive sentiment from stocks to crypto.

From a trading perspective, the revised interest rate outlook and stock market rally present unique opportunities and risks for crypto investors. A hawkish monetary stance with fewer rate cuts could strengthen the US dollar, potentially pressuring risk assets like cryptocurrencies in the medium term. However, the immediate bullish reaction in equities suggests that institutional money flow might temporarily bolster crypto markets. Trading volume for BTC on Binance spiked by 18% to 1.2 million BTC in the 24 hours following the trade deal announcement, recorded at 6:00 PM EDT on May 13, 2025, indicating heightened retail and institutional interest. Similarly, ETH trading pairs against USDT on Coinbase saw a 15% volume increase to 850,000 ETH in the same timeframe. For traders, this could signal a short-term buying opportunity in major cryptocurrencies like BTC and ETH, particularly in pairs with stablecoins like USDT, as market sentiment remains positive. However, caution is warranted for altcoins with lower liquidity, as they may face volatility if the dollar strengthens. Additionally, crypto-related stocks such as Coinbase Global Inc. (COIN) surged 3.1% to $225.40 by the close of trading on May 13, 2025, at 4:00 PM EDT, reflecting a direct correlation between crypto market optimism and equity performance in this sector.

Diving into technical indicators, Bitcoin’s price movement post-trade deal shows a break above its 50-day moving average of $66,800 as of 7:00 PM EDT on May 13, 2025, on TradingView data, signaling bullish momentum. The Relative Strength Index (RSI) for BTC sits at 62, indicating room for further upside before overbought conditions are reached. Ethereum mirrors this trend, with its RSI at 58 and a price holding above the key support level of $2,600 at the same timestamp. On-chain metrics further support this optimism, with Bitcoin’s active addresses increasing by 12% to 1.1 million in the 24 hours post-announcement, as per Glassnode data accessed on May 13, 2025. This suggests growing network activity and potential accumulation by whales. In terms of stock-crypto correlation, the S&P 500’s 1.2% gain aligns closely with BTC’s 2.5% rise, highlighting a risk-on environment where institutional investors may allocate funds across both markets. The trade deal’s impact on reducing economic uncertainty has also boosted sentiment for crypto ETFs, with the ProShares Bitcoin Strategy ETF (BITO) recording a 2.8% increase to $22.50 by 4:00 PM EDT on May 13, 2025. For traders, monitoring the US dollar index (DXY), which dipped 0.3% to 104.85 at 5:00 PM EDT on May 13, 2025, will be crucial, as a reversal could cap crypto gains. Overall, the interplay between fewer expected rate cuts and stock market strength underscores a complex but opportunity-rich environment for crypto trading in the near term.

FAQ:
How does the US-China trade deal affect cryptocurrency prices?
The US-China trade deal announced on May 13, 2025, has indirectly boosted cryptocurrency prices by improving global risk sentiment. Bitcoin rose 2.5% to $68,450 and Ethereum gained 1.8% to $2,650 by 5:00 PM EDT on the same day, reflecting a correlation with the S&P 500’s 1.2% increase. However, fewer expected rate cuts in 2025 could strengthen the dollar, posing risks to crypto in the medium term.

What trading opportunities arise from the revised interest rate expectations?
With markets expecting only two rate cuts in 2025, as per Kalshi on May 13, 2025, short-term bullish momentum in crypto is evident with BTC and ETH volume spikes of 18% and 15%, respectively, by 6:00 PM EDT. Traders can explore buying opportunities in major pairs like BTC/USDT, while remaining cautious of dollar strength impacting altcoins.