Trump stated that the US-China trade truce is "close"; can Bitcoin escape its predicament?

U.S. President Trump recently announced that the U.S. and China are "very close" to extending the trade truce, with both sides agreeing to drop tariffs and relax technology export restrictions. Can this favourable information bring a turnaround for the recently sluggish Bitcoin (BTC) market? Against the backdrop of ETF fund outflows, cooling institutional demand, and technical pressure, has BTC already emerged from its predicament? This article takes you deep into the latest macro dynamics and Bitcoin price predictions.

The US-China trade negotiations show signs of hope, market risk sentiment improves

Trump emphasized during an interview with CNBC that the United States and China are "very likely" to extend the trade truce, stating that both sides are working hard to reach an agreement. The preliminary agreement is set to expire on August 12, and if it is successfully extended, it will alleviate global market concerns about the tariff war, providing breathing room for risk assets such as cryptocurrencies.

Bitcoin price is affected by both risk aversion sentiment and ETF capital outflows

Despite the favourable information released in the macro environment, Bitcoin failed to hold the psychological level of $120,000 last week, dropping to a low of $111,920, with a weekly decline of nearly 5%. The main reasons include: the lack of a clear strategy in the digital asset working group's report, the Federal Reserve's hawkish stance, and the risk-off selling triggered by Trump's new tariff announcement. The US spot Bitcoin ETF has seen capital outflows for three consecutive days, with a single-day outflow reaching as high as $333 million on Monday, clearly indicating a weakening of institutional demand.

Defensive posture in the derivatives market, traders are in a strong wait-and-see mood

K33 Research report shows that CME BTC futures open interest has dropped to 140,000 BTC, a three-month low. BITX leveraged ETF exposure has also fallen to its lowest since April, and the futures premium has dropped to a two-month low. Traders are generally reluctant to build long-term bullish positions, indicating a cautious attitude towards the short-term trend in the market.

Technical Analysis: The Dead Cat Bounce Still Carries Downside Risks

The 4-hour chart shows that after a 6% drop in BTC last week, there was a short-term rebound of 1.48% on Sunday (dead cat bounce). The current price is around $114,500, and if it can break through the 50% retracement level of $118,879 and the 50 EMA, it may be poised for further rebound. Otherwise, if the downtrend continues, BTC may test the support at $112,032. The RSI is currently at 44, indicating a weak technical outlook.

Conclusion

Trump released favourable information regarding the China-US trade truce, bringing a temporary boost to the Bitcoin market. However, the outflow of ETF funds, weak institutional demand, and technical pressures indicate that BTC still carries short-term downward risks. Investors should closely monitor the resistance at $118,879 and support at $112,032 to grasp the turning points for long and short positions.