Recent gains in cryptocurrency prices face serious threat as China denies trade negotiations with the US, contradicting Trump’s claims of daily talks.

The cryptocurrency market finds itself in an increasingly precarious position as geopolitical tensions between the world’s two largest economies intensify. Just as Bitcoin touched the $85,000 mark and altcoins enjoyed substantial gains, a diplomatic clash threatens to derail the momentum.

China Calls Trump’s Bluff on Trade Talks

In a stunning development that has sent ripples through financial markets, China’s Commerce Ministry has flatly denied President Donald Trump’s assertion that the two nations are engaged in active trade discussions. Ministry spokesman He Yadong dismissed reports of progress toward a tariff deal as “groundless” and urged the United States to “show sincerity” if it genuinely wants to negotiate.

This direct contradiction comes after Trump’s recent statements suggesting daily communication with Chinese officials and hinting at potential reductions to the hefty 145% tariffs his administration had imposed on Chinese goods.

Market Reaction Hangs in the Balance

The crypto market, which had been experiencing a significant correction following its recent surge, now faces the possibility of more dramatic losses. The contradiction between Trump’s claims and China’s official position creates exactly the kind of uncertainty that typically destabilizes markets.

However, there’s an interesting dynamic at play. Bitcoin has shown signs of decoupling from traditional stock markets, with investors increasingly viewing the leading cryptocurrency as a safe-haven asset similar to gold rather than a high-risk investment. This evolving perception could potentially insulate Bitcoin from the worst effects of trade war turbulence.

Technical Analysis Points to Key Levels

According to crypto analyst Titan of Crypto, Bitcoin’s technical indicators reveal critical price points to watch. He notes that the previous daily low (PDL) around $92,700 has been breached, with price action currently finding support at a significant Fair Value Gap.

Looking ahead, the analyst identifies the previous daily high and monthly high at $95,000 as the next important resistance levels. Whether Bitcoin moves up or down may depend on whether the lagging span can successfully break out of the Kumo Cloud.

Should a deeper pullback materialize, Titan emphasizes that the Tenkan level at approximately $86,000 represents a crucial support to monitor.

Will Diplomacy Prevail?

Despite China’s denial, President Trump has reiterated that communication with Chinese officials occurred today. This conflicting information creates both uncertainty and possibility – if the two economic superpowers actually reach an agreement, the cryptocurrency market could resume its upward trajectory.

For now, traders and investors remain on edge, watching for any concrete developments in the US-China relationship that might provide clearer direction for crypto prices in the coming days and weeks.