Bitcoin News Today: U.S.-EU Trade Deal Fuels Dollar Rally, Bitcoin Peaks at $120,000, Ethereum Gains $78 Billion Market Cap

Bitcoin and Ethereum faced a mixed response following the U.S.-EU trade deal finalized on July 28, 2025, as the strengthening U.S. dollar reshaped market dynamics. The agreement, which aimed to reduce tariffs and harmonize regulatory frameworks, initially spurred a rally in crypto markets but was soon met with corrections, underscoring the sector’s sensitivity to macroeconomic shifts. Bitcoin surged to a record ~$120,000 before retreating to ~$118,000, while Ethereum saw institutional inflows exceed $2.2 billion, pushing its market capitalization higher by $78 billion. However, the dollar’s post-deal strength created headwinds for cryptocurrencies, which often thrive during periods of fiat currency weakness [1].

The trade deal’s impact on global markets was immediate and pronounced. The U.S. Dollar Index rose sharply, driving major currencies like the euro and British pound to multi-week lows. This dollar dominance, fueled by optimism over reduced trade tensions, shifted investor focus toward equities and higher-yield assets, diminishing cryptocurrencies’ appeal as an inflation hedge. Despite Bitcoin’s proximity to $120,000 and Ethereum’s eyeing of $4,000, both assets struggled to break through key resistance levels amid heightened volatility [2].

Analysts note a divergence between pre-deal forecasts and post-announcement outcomes. A July 12 report from Mitrade had predicted Bitcoin near an all-time high and Ethereum surpassing $4,000, but these projections did not account for the dollar’s subsequent rally. Post-deal, traders have prioritized U.S. equity gains and dollar-linked assets over crypto exposure, reflecting a recalibration of risk appetite. RTTNews observed that crypto markets remained “muted” in the wake of the trade agreement, with Bitcoin and Ethereum failing to capitalize on broader market optimism [1].

Technical analysis of the crypto pair reveals a tug-of-war between bullish fundamentals and bearish sentiment. Bitcoin’s price clings to support above $110,000, but its inability to breach $130,000 highlights near-term indecision. Ethereum’s proximity to $4,000 marks a critical psychological threshold that could either spark a breakout or trigger profit-taking. The broader crypto market’s trajectory, however, remains contingent on the dollar’s resilience, which has found renewed momentum post-deal [2].

The trade agreement’s influence extends beyond immediate price movements. By reshaping risk sentiment, it has altered the traditional role of cryptocurrencies as a macro hedge. With the dollar’s strength anchored by trade optimism, crypto’s appeal as a diversified asset is being tested. While DeFi and stablecoin sectors have shown resilience, no major liquidity disruptions have emerged. The market’s response underscores the evolving interplay between geopolitical trade dynamics and fiat currency performance [1].

Looking ahead, attention turns to the Federal Reserve’s policy moves and U.S. economic data, which will determine whether the dollar’s strength persists. These factors will directly shape the near-term outlook for cryptocurrencies. For now, the trade deal’s aftermath highlights the delicate balance between geopolitical developments and asset class performance, reinforcing the interconnectedness of global markets.

Sources:

[1] RTTNews, “Crypto Markets Muted Amidst The Dollar’s Strength,” https://www.rttnews.com

[2] Mitrade, “Top 3 Price Prediction: Bitcoin, Ethereum, Ripple,” https://www.mitrade.com/au/insights/news/live-news/article-1-990757-20250728