[Bitop Review] US-China Trade Talks Make Progress, Bitcoin Surges to 115K, Over 60,000 BTC Flow Out from Long-Term Holder Wallets

Following indications that the US and China are nearing the completion of a comprehensive trade agreement, US stock index futures experienced a rise. This optimism is further fueled by US President Trump's visit to the region for a series of diplomatic meetings. Concurrently, the overall market capitalization of the cryptocurrency market has climbed to $3.88 trillion, reflecting a 24-hour increase of 2.86%. Bitcoin (BTC) saw a significant surge, reaching $115K this morning, while Ethereum (ETH) has successfully returned above the $4,200 mark. However, data from Glassnode suggests that approximately 62,000 bitcoins have flowed out from long-term inactive wallets, a development that may potentially limit Bitcoin's upward momentum.

US-China Trade Talks Show Progress, Boosting Stock Markets

Progress in the US-China trade talks, highlighted at the ASEAN Summit on October 26, has helped to ease concerns regarding a full-scale tariff war. The United States has agreed to postpone the imposition of 100% tariffs on Chinese goods, while China has in turn postponed restrictions on rare earth exports. This de-escalation in trade tensions has contributed to a positive sentiment across financial markets.

The broader cryptocurrency market has responded favorably to these developments, with its overall market capitalization rising to $3.88 trillion, marking a 24-hour increase of 2.86%. Bitcoin (BTC) experienced a notable surge, reaching $115K earlier today. Ethereum (ETH) also showed strength, returning to trade above $4,200.

Significant Bitcoin Outflows from Inactive Wallets Could Temper Price Increases

Data compiled by Glassnode indicates a recent decline in Bitcoin's illiquid supply. Specifically, an estimated 62,000 bitcoins have moved out of long-term inactive wallets since the middle of October. A decrease in illiquid supply typically means more bitcoin is available for trading. Without a corresponding increase in new demand, this could place a cap on Bitcoin's price appreciation.

The illiquid supply has been a significant factor driving the current market cycle. However, the recent pullback appears to have disrupted this trend. Historically, similar downward trends in supply returning to the market have been associated with weakened market momentum. While there have been larger outflows in the past, such as the 400,000 BTC observed in January 2024, the current trend warrants attention.

Interestingly, whale wallets have been observed to be accumulating assets. Over the last 30 days, holdings within whale wallets have seen an increase, and since October 15, these large holders have not engaged in significant selling activity.

The current outflows are primarily originating from wallets holding between 0.1 and 10 BTC, which equates to approximately $10,000 to $1 million. These wallets have been consistently selling since November 2024. This pattern suggests that momentum buyers have largely exited the market, and dip buyers have not provided sufficient demand to absorb the available supply. This imbalance is currently exerting downward pressure on prices, awaiting a rebound in spot demand.

Key Economic Events and Tech Earnings on the Horizon

Market participants will be closely monitoring a series of central bank announcements this week, including interest rate decisions from the Federal Reserve, the European Central Bank, and the Bank of Japan. The Federal Reserve is widely anticipated to implement a 25 basis point rate cut, while the ECB and BOJ are expected to maintain their current interest rates.

In addition to monetary policy updates, earnings reports from major technology companies are also a key focus. Alphabet, Amazon, Apple, Meta, and Microsoft are scheduled to release their third-quarter financial results this week. Furthermore, MicroStrategy is set to announce its earnings after the US market close on October 30.