Bitcoin prices fell on Thursday despite initial market optimism over a tentative U.S.-China trade framework, as investors grew wary of new tariff threats from President Donald Trump and weighed the impact of softer U.S. inflation data on monetary policy.

Bitcoin Reacts to Mixed Trade Signals

The world's largest cryptocurrency dropped 1.7% to $107,782.20 in early Asian trade, as traders digested Trump's announcement that a trade "deal" with China was “done”—pending approval from both heads of state.

But investor sentiment soured after Trump revealed he would send new "take it or leave it" tariff letters to other major economies ahead of a July 9 deadline, raising fears of prolonged trade tensions.

“Despite a tentative truce, markets aren't buying into a full-scale resolution,” noted several crypto analysts.

Inflation Data Adds Another Layer

The softer-than-expected U.S. Consumer Price Index (CPI) reading on Wednesday offered temporary support for rate cut hopes, but it wasn't enough to keep Bitcoin in the green. Investors now await the Federal Reserve's policy decision next week, with the market largely pricing in a hold on interest rates.

Capital Flows Shift

According to Cryptocurrency Daily, Bitcoin's short-term momentum has slowed in sync with broader macro uncertainty. The Cryptocurrency Historical Data API shows a steady rise in BTC through the past quarter—up over 15%—but with growing vulnerability to external shocks.

Key Takeaways

• Bitcoin dipped 1.7% on Thursday amid tariff uncertainty and mixed macro data

• Trump's aggressive stance clouds long-term crypto stability despite near-term trade progress

• Investors shift focus to the Fed's interest rate decision, expected next week