Cryptocurrency markets exhibited minimal bullish momentum on Monday, despite an optimistic outlook surrounding U.S.-China trade negotiations that uplifted Asian equities. Bitcoin, the largest cryptocurrency by market capitalization, remained relatively stagnant, trading close to $105,650 and forming a doji candle on Sunday, signaling market indecision.
Recent data from Blockchain.com highlighted a significant reduction in network activity, with the seven-day moving average of daily on-chain transactions plummeting to 315.48K, the lowest level observed in over a year. XRP, a cryptocurrency focused on payment solutions, attempted to break free from a downward trend line established since mid-May but was trading at $2.24, reflecting a decrease of over 1% on the day. The upcoming APEX 2025 conference for the XRP Ledger in Singapore could potentially introduce volatility this week.
Meanwhile, Dogecoin, a meme-based cryptocurrency, fell nearly 2%, now nearing the 18-cent mark, after struggling to maintain a position above the 100-day simple moving average over the weekend. In contrast, Hong Kong’s Hang Seng index surged by 1.3%, surpassing 24,000 for the first time since March 24, fueled by positivity regarding the ongoing U.S.-China trade talks.
The anticipated round of discussions in London has heightened hopes among market participants. High-level trade officials are expected to engage throughout the week, with President Donald Trump expressing optimism regarding the outcomes. Other Asian markets such as South Korea’s KOSPI and China’s Shanghai Composite also posted gains, despite China facing deepening consumer and producer price deflation.
China’s National Bureau of Statistics announced a 0.1% year-over-year drop in consumer prices for May, marking a continuation of negative inflation that started in February. Producer prices fell by 3.3%, exceeding analysts’ expectations, indicating ongoing deflationary pressures exacerbated by U.S. tariffs. Robin Brooks, a senior fellow at the Brookings Institution, noted that these tariffs are likely contributing to significant deflationary shocks for China’s economy.
In response to the economic conditions, the People’s Bank of China has initiated measures such as cutting key interest rates and reducing reserve requirements, aiming to boost domestic demand. Such potential stimulus from China could provide a more favorable environment for financial markets, including cryptocurrencies.
Looking ahead, attention is shifting to upcoming U.S. consumer price index (CPI) data anticipated later this week. Analysts predict a monthly growth pace of 0.2% aligning with April’s figures, which could indicate rising price pressures linked to tariffs. Insights from this data will be crucial, as any unexpected increases in inflation could impact Federal Reserve interest rate decisions and introduce volatility in markets.
Overall, while the sentiment in the cryptocurrency space is cautious, the prospect of increased liquidity and stimulus in both the U.S. and China adds a glimmer of hope that recovery could be on the horizon for cryptocurrencies and broader financial markets.