A fragile calm greets Asian markets
After a bruising weekend for global assets, Asian trading hours opened to a rare sight: green.
Bitcoin rose back above $109,000, trimming part of Friday’s 8% drop, while Ethereum edged up near $3,850 as traders took comfort in Beijing’s measured tone following the U.S. tariff shock.
China’s government warned of “necessary counter-measures” but did not deliver an immediate retaliation, giving markets room to breathe after days of panic selling triggered by President Donald Trump’s announcement of 100% tariffs on Chinese technology imports.
Asian equities mirrored the crypto bounce. The Hang Seng gained nearly 1.2% in early trade, and risk appetite returned in derivatives markets, where perpetual funding rates turned positive again for Bitcoin and Solana.
“Markets were braced for a weekend escalation that didn’t come,” said one Hong Kong-based derivatives trader. “The lack of retaliation gave traders an excuse to cover shorts.”
From crash to cautious consolidation
Friday’s session had been brutal. Bitcoin fell from $115,000 to below $105,000, Ethereum lost almost 6%, and total crypto market capitalization shed roughly $19 billion in 24 hours — the sharpest single-day decline since April.
Liquidations topped $350 million as leveraged long positions were flushed out. The collapse coincided with a global equity sell-off that erased more than $700 billion in tech market value.
Over the weekend, thin liquidity left prices range-bound, but sentiment began to stabilize after reports from Beijing suggested policymakers were opting for diplomacy over confrontation — at least for now.
Early market dynamics
- Bitcoin (BTC): trading around $109,400 with support near $106,000; resistance around $111,000
- Ethereum (ETH): holding $3,840, with traders watching the $3,700–$3,900 range
- Solana (SOL): rebounded 5% from weekend lows near $152, showing relative strength among majors
- Volatility Index: BTC’s implied vol dropped from 64% to 58%, signaling modest risk compression
Funding rates across major exchanges flipped positive for the first time since Friday, indicating a mild return of bullish positioning.
Analysts split on what comes next
Market strategists remain divided. Some see this rebound as technical relief, not the start of a sustainable recovery. Others argue that panic conditions are easing as traders digest the macro shock.
“Markets often overreact to tariff headlines,” said a Singapore-based crypto fund manager. “The underlying story — slower liquidity and higher volatility — doesn’t vanish overnight. But once fear exhausts itself, you usually get a reflexive bounce.”
Macro traders, however, warn that the calm could be fleeting. Any hardline statement from Washington or Beijing could reignite the sell-off, especially with bond yields still rising and liquidity conditions tightening globally.
What to watch through Monday
- Chinese state media briefings: A measured response could extend relief; escalation talk would erase gains.
- Asian equities correlation: If tech rebounds hold, crypto could mirror intraday sentiment again.
- Funding and open interest data: Sustained long buildup would signal real risk appetite returning.
- U.S. session cues: Futures in Nasdaq and S&P 500 remain the key cross-asset trigger for afternoon volatility.
Signals beneath the calm
Weekend chatter on X (formerly Twitter) reflected a shift from panic to patience. Influential analysts called the move “a volatility reset” rather than a bear market resumption. Whale data supported that narrative: net BTC inflows to long-term wallets increased modestly over the weekend, according to Glassnode estimates.
Still, caution prevails. As one trader posted late Sunday: “China blinked — but only once. We’re one headline away from round two.”
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