Major cryptocurrencies showed little bullish momentum on Monday, even as optimism around U.S.-China trade talks boosted Asian stock markets.
Bitcoin, the top cryptocurrency by market capitalization, traded flat to slightly lower near $105,650. On Sunday, it formed a doji candle—a sign of market indecision—according to data from TradingView. Meanwhile, Blockchain.com data revealed a significant slowdown in network activity, with the seven-day moving average of daily on-chain transactions dropping to 315,480, marking the lowest level in at least a year.
XRP, a payments-focused cryptocurrency, struggled to gain upward momentum despite breaking above a bearish trendline stemming from mid-May highs. At press time, XRP was trading at $2.24, down over 1% for the day (UTC). Market volatility could pick up this week as the XRP Ledger’s APEX 2025 conference begins in Singapore.
Meme cryptocurrency Dogecoin slipped nearly 2%, approaching 18 cents, after failing to secure a position above the 100-day simple moving average (SMA) over the weekend.
Hang Seng tops 24K
Hong Kong’s Hang Seng index climbed 1.3%, surpassing the 24,000 mark for the first time since March 24, according to TradingView. The rally was driven by renewed optimism surrounding this week’s U.S.-China trade talks.
“Optimism is at its highest level since Trump’s election as senior trade officials prepare to meet in London starting Monday. Talks are expected to continue throughout the week, with Trump himself expressing a positive outlook,” ForexLive’s Chief Currency Analyst Adam Button wrote in a blog post.
“The meeting should go very well,” President Donald Trump stated on Truth Social Friday, announcing the upcoming trade discussions in London.
Other Asian markets also saw gains, with South Korea’s KOSPI and China’s Shanghai Composite advancing, despite worsening consumer and factory gate deflation in China.
China’s deflation deepens
China’s consumer prices fell 0.1% year-over-year in May, according to data released Monday by the National Bureau of Statistics. This marks a continuation of deflation, with the consumer price index (CPI) having first turned negative in February.
Meanwhile, the producer price index (PPI), which tracks factory gate prices, dropped 3.3% year-over-year in May—steeper than the 3.2% decline analysts had anticipated. Factory gate prices have been in deflation since October 2022.
Robin Brooks, senior fellow in the Global Economy and Development program at the Brookings Institution, pointed to U.S. tariffs as a key factor driving a deflationary shock for major exporters like China.
“China’s producer price inflation for consumer goods is at its lowest point since the 2008 crisis. U.S. tariffs are pushing China toward full deflation. The necessary conditions are all present: weak consumption and a heavy debt burden. U.S. tariffs are now the catalyst,” Brooks wrote on X.
The deepening deflation may prompt China to boost domestic demand through additional liquidity easing measures.
In May, China’s central bank cut key interest rates by 10 basis points to historic lows and reduced the reserve requirement ratio to inject liquidity into the market. Last week, the state-run China Securities Journal reported that the People’s Bank of China may lower the reserve requirement ratio further later this year to support economic growth and resume government bond trading.
Increased stimulus from China could have positive implications for financial markets, including cryptocurrencies.
Focus on U.S. CPI
Markets are closely watching the U.S. consumer price index (CPI) report for May, due Wednesday, for signs that President Trump’s tariffs are contributing to rising price pressures in the economy.
The headline CPI is expected to match April’s monthly growth rate of 0.2%, which translates to an annualized increase of 2.5%, up from 2.3% in April, according to FXStreet. Meanwhile, core inflation—which excludes the more volatile food and energy sectors—is forecast to rise slightly to 2.9% in May from 2.8% the previous month.
Economists at Barclays anticipate the report will reveal the first clear evidence of tariff-driven price increases across a broad range of core goods.
A hotter-than-expected CPI reading could reduce the likelihood of Federal Reserve rate cuts, potentially triggering increased volatility in financial markets.
