Major cryptocurrencies showed limited bullish momentum on Monday, even as optimism surrounding U.S.-China trade negotiations boosted Asian stocks. Bitcoin, the top cryptocurrency by market cap, traded relatively flat near $105,650, forming a doji candle on Sunday—a sign of market indecision. Data from Blockchain.com indicates a slowdown in network activity, with the seven-day average of daily on-chain transactions dropping to around 315,480, the lowest in over a year.
Meanwhile, XRP, known for its focus on payments, struggled to gain upward momentum despite breaking above a bearish trendline from mid-May highs. At press time, XRP was trading at $2.24, down over 1% for the day. Volatility may pick up this week, especially as the XRP Ledger’s APEX 2025 conference kicks off in Singapore.
Dogecoin, the popular meme cryptocurrency, declined nearly 2%, approaching 18 cents after failing to hold above its 100-day moving average over the weekend. In Hong Kong, the Hang Seng index advanced 1.3%, surpassing 24,000 points for the first time since March 24. This rally was driven by growing optimism about upcoming U.S.-China trade talks. Top trade officials from both countries are expected to meet in London starting Monday, with indications that negotiations could last all week. President Trump expressed confidence in the talks, stating on social media that they should go very well.
Despite China’s ongoing economic challenges, including deepening consumer and factory gate deflation, other Asian indices like South Korea’s KOSPI and China’s Shanghai Composite gained ground. China’s consumer prices fell 0.1% year-over-year in May, marking a negative first since February. The producer price index also declined sharply, falling 3.3% in May—worse than analysts expected. Since October 2022, factory gate prices have been in deflation.
Experts warn that U.S. tariffs are contributing to China’s export-driven deflationary pressures. Robin Brooks from the Brookings Institution noted that U.S. tariffs are acting as a deflationary shock for Chinese exports, pushing factory prices to their lowest since 2008. This could prompt Chinese authorities to boost domestic demand through further liquidity easing. Indeed, China’s central bank cut key interest rates by 10 basis points in May and reduced reserve requirements, aiming to stimulate growth. There are reports that additional easing measures may be on the horizon later this year, which could positively impact financial markets and cryptocurrencies.
Markets will closely watch the U.S. Consumer Price Index (CPI) data due Wednesday, as it may reveal whether tariffs are adding to inflation pressures. Economists expect May’s CPI to rise by 0.2% month-over-month, with annual inflation reaching around 2.5%. Core inflation, excluding food and energy, is forecasted to increase to 2.9%. A higher-than-expected inflation reading could influence Federal Reserve policy, potentially delaying rate cuts and introducing volatility into financial markets.
