5 min readBitcoin is unchanged, hovering around 110k for a second straight session. The latest US-China trade developments and US inflation data have little impact on BTC.
US CPI is cooler than feared & US-China trade deal
US CPI inflation rose by less than feared for a fourth straight month in May. US CPI rose 0.1% MoM in May, below the 0.2% forecast. On an annual basis, CPI rose 2.4%, up from 2.3% in April but still below the 2.5% expected. The data suggests that firms are absorbing increased costs from Trump’s trade tariffs rather than passing them on to the consumer. A build-up of inventory prior to the tariff hikes may also be helping to keep prices down.
The market reaction to the data has been limited, with BTC and US equities broadly unchanged and the USD only modestly weaker. Typically, cooler inflation would be expected to lift cryptocurrency demand as it fuels rare cut bets. However, investors are looking through today’s data.
If the higher reciprocal tariffs are applied, it will be harder for companies to protect the consumer. For this reason, inflation is expected to rise more meaningfully in the coming months.
Given the limited pass-through so far and expectations that this could increase, the Fed will likely keep interest rates unchanged for now. The market is pricing in a 75% chance of a 25 basis point rate cut in September.
US-China agreed to maintain tariffs at current, lower levels following negotiations in London this week. Trump said that Chinese President Xi Jinping must still formally sign off on the deal, which will see China supply rare earths to extend the trade war truce.
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Ethereum continues to outperform
While BTC is unchanged on the day, Ethereum is rising over 2.5%, with gains of over 5% across the past 24 hours. Ethereum has been playing catch-up in recent weeks after falling across the first four months of the year to a low of 1345. ETH is up 40% from its 2025 low, rising to a 15-week high
The move higher comes as ETH ETFs recorded a seventeenth straight day of net inflows on Tuesday, a run last seen in November last year when Trump won the elections.
The ETH/BTC ratio, which measures Ether in terms of Bitcoin, has also improved in recent weeks, rising to 0.25.
ETH to $3000?
After a period of consolidation, ETH/USD has risen above its 200 SMA and resistance at 2750 as it breaks out. Buyers will look to extend gains towards 3000.
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