Bitcoin ahead of U.S.-China summit and FOMC..."Direction will depend on the outcome"

Bitcoin declines ahead of U.S.-China summit and FOMC

Investors stay on the sidelines amid trade negotiation hopes and rate cut expectations

Direction likely to hinge on remarks from Trump and Powell

Bitcoin (BTC) prices have turned downward. This is interpreted as investors reducing positions and shifting to a wait-and-see stance ahead of the U.S.-China summit scheduled for the 30th and the Federal Open Market Committee (FOMC) regular meeting.

On the 28th (local time), on the Binance Tether (USDT) market, Bitcoin was trading at $113,200, down about 1% from the previous day. On the 27th, signs of easing trade tensions between the U.S. and China pushed prices above $116,000, but short-term profit-taking ahead of major events has since emerged.

Market participants view the outcomes of the U.S.-China summit and the FOMC meeting as key variables that could determine Bitcoin's short-term trend.

Trump to meet Xi in Busan..."Impact on Bitcoin's short-term direction"

U.S. President Donald Trump, attending the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, is scheduled to hold an in-person meeting with Chinese President Xi Jinping in Busan on the 30th.

Optimism about the two countries' trade negotiations has increased. At a corporate event in Tokyo on the 28th, President Trump expressed confidence, saying, "The negotiations will go very well." At the APEC meeting he added, "I want to reach a trade agreement with Chairman Xi. The whole world is watching us." Wang Yi, China's foreign minister, also emphasized a cooperative stance in a call with U.S. Secretary of State Marco Rubio, saying, "I hope the two countries prepare well for the summit and move in the same direction."

Scott Bessent, U.S. Secretary of the Treasury, earlier said at the ASEAN summit in Kuala Lumpur on the 26th that "we have a successful framework to discuss at Thursday's meeting." The reported agreement could include △China delaying rare earth export controls △the Trump administration putting a 100% tariff increase on China on hold △the resumption of China's imports of U.S. soybeans.

These concrete moves toward agreement are raising hopes of easing global market tensions. In past U.S.-China trade negotiation phases, Bitcoin has surged more than 8% in a single day, so analysts say the summit's outcome could be a key factor determining Bitcoin's short-term direction.

Jeong Seok-mun, head of the Presto Research Center, analyzed, "It is highly possible both countries adopted a strategy of making tough statements before negotiations to secure an advantageous position," and added, "As a result, this summit is likely to play out in a way that is favorable to Bitcoin."

However, warnings have been raised that if negotiations fail or the agreement falls short of expectations, corrective pressure across the virtual asset (cryptocurrency) market could increase. Cointelegraph wrote, "If the summit ends without substantive progress, Bitcoin is likely to continue a short-term 'ping-pong' market between the $110,000 support and the $116,000 resistance."

FOMC rate cut certain…market focus shifts to 'end of QT'

At 3:30 a.m. (Korea time) on the same day, the Federal Open Market Committee (FOMC) of the U.S. Federal Reserve (Fed) will hold its regular meeting. A 0.25% point cut in the policy rate is virtually certain, shifting market attention to whether quantitative tightening (QT) will end.

Expectations of a rate cut have already been largely priced into the market. Accordingly, if the Fed halts QT and expands liquidity, there is growing anticipation that funds will flow back into risk assets including Bitcoin. On Wall Street, there is speculation that "the Fed is likely to end the QT policy within this month."

Jeong Seok-mun said, "More than the rate cut itself, Chair Powell's remarks at the FOMC will have a greater impact on the market," adding, "If dovish comments such as the end of QT are made, this could act as positive material for Bitcoin."

Arthur Hayes, BitMEX co-founder, also predicted, "QT has already effectively ended. From next year, liquidity supply within the U.S. will resume in earnest," and "this will create a very favorable environment for risk assets like Bitcoin."

On the other hand, some suggest Chair Powell may avoid overly definitive statements and maintain a cautious stance. Economists at Deutsche Bank forecast, "Chair Powell is likely to avoid firm commitments on additional actions through the end of the year and keep various options open," warning that "the market could swing depending on the tone of his remarks."

Hwang Du-hyun, Bloomingbit reporter cow5361@bloomingbit.io