Bitcoin Falters Amid Hang Seng Rally Fueled by U.S.–China Talks; Inflation Print Looms

Crypto Stalls as Hang Seng Crosses 24K; U.S.–China Talks and CPI in Focus

Asian markets surged Monday as investors welcomed renewed dialogue between the U.S. and China, with Hong Kong’s Hang Seng Index jumping 1.3% to close above 24,000—a level not seen since March. The optimism, however, failed to lift the crypto market, where key tokens remained subdued ahead of critical U.S. inflation data.

Bitcoin Holds Ground Amid On-Chain Slowdown

Bitcoin (BTC) hovered around $105,650, showing minimal movement after Sunday’s doji candle hinted at indecision. According to Blockchain.com, BTC’s seven-day average of daily transactions slid to 315,480—its lowest point in over a year—signaling weakening on-chain activity.

The broader crypto market followed suit:

XRP edged lower by over 1% to $2.24, despite briefly breaking a multi-week downtrend. The APEX 2025 conference in Singapore this week could bring renewed volatility.
Dogecoin (DOGE) dropped nearly 2% to $0.161, unable to hold above its 100-day SMA, with resistance near $0.18 remaining intact.

Trade Talks Drive Asia Rally

The gains in Hong Kong came as U.S. and Chinese trade officials gathered in London for a new round of negotiations. President Trump, posting Friday on Truth Social, expressed optimism, saying, “The meeting should go very well.” Analysts believe the talks could continue throughout the week, potentially providing a near-term tailwind for Asian markets.

Other indices in the region, including the KOSPI and Shanghai Composite, also advanced—defying bearish data out of China.

China’s Deflation Deepens Despite Stimulus

New data from China’s National Bureau of Statistics showed:

Consumer prices fell 0.1% YoY in May—continuing a deflationary trend that began in February.
Producer prices dropped 3.3%, worse than the expected 3.2% decline.

Economist Robin Brooks of the Brookings Institution noted that the combination of weak consumption, high debt, and U.S. tariffs is pushing China deeper into deflationary territory.

In response, the People’s Bank of China (PBOC) is expected to expand monetary support. It has already cut rates and lowered reserve requirements this year, and further RRR reductions are reportedly on the table.

Markets Brace for U.S. CPI

All eyes now turn to the U.S. Consumer Price Index (CPI) due Wednesday, with projections pointing to:

Headline CPI: +0.2% MoM | +2.5% YoY (vs. 2.3% in April)
Core CPI: +2.9% YoY (up from 2.8%)

Economists at Barclays say the report could show the first signs of inflationary pressure from newly imposed tariffs. A hotter-than-expected print could dampen prospects for Fed rate cuts, increasing volatility across both traditional and digital asset markets.