Bitcoin News Today: Crypto's 'Healthy Reset' Sparks Rally as Geopolitical Optimism Grows

Digital assets staged a dramatic recovery following one of the steepest sell-offs in crypto history, with memecoins and major cryptocurrencies rallying as geopolitical tensions between the U.S. and China eased, as Cointribune reported. The memecoin market cap surged to $68.8 billion, driven by double-digit gains in tokens like Dogecoin (DOGE), Dogwifhat (WIF), and Pudgy Penguins (PENGU), Cointribune said. Bitcoin (BTC) rebounded to $115,227 after plunging to $109,000 on Friday, while Ethereum (ETH) and Solana (SOL) rose 8.4% and 8.7%, respectively, Cointribune added.

The selloff, triggered by President Donald Trump's announcement of 100% tariffs on Chinese imports and the cancellation of a planned Xi Jinping meeting, wiped out nearly $20 billion in liquidations, Cointribune reported. However, Trump's subsequent conciliatory remarks—stating the U.S. "wants to help China, not hurt it"—spurred a market rebound, Decrypt reported. China's Ministry of Commerce also signaled openness to dialogue, easing fears of a full-blown trade war, Coin360 reported.

Arjun Vijay, founder of Giottus, described the crash as a "temporary glitch" caused by cascading liquidations and excessive leverage, Cointribune reported. "During rebounds, the riskiest assets rebound the most," he said, explaining why memecoins led the recovery, Cointribune added. Charmaine Tam of Hex Trust echoed this, calling the correction a "healthy reset" that cleared toxic leverage and stabilized institutional infrastructure, Cointribune noted. Bitcoin's dominance below 60.5% further positioned altcoins to benefit as liquidity returned, Cointribune observed.

The rebound was not without challenges. Smaller altcoins like XRP and Solana faced intraday drops exceeding 90% during the crash, Bloomberg reported. Derivatives markets saw $19.1 billion in liquidations, with Bitcoin open interest collapsing by $12 billion in a single day. Yet, on-chain data indicated stabilization, with exchange inflows declining and long-term holders accumulating during the downturn.

Geopolitical uncertainty remains a wildcard. Prediction markets assign only a 9% chance of a Trump-Xi meeting before year-end, Cointribune said, while analysts caution that renewed tensions could reignite volatility. Despite this, the market's resilience has sparked optimism. Bitcoin's price testing a "golden cross" pattern—a historically bullish signal—has led some analysts to predict a rally to $200,000 by year-end, according to a CoinDesk analysis.

As the crypto market digests the fallout, the focus shifts to macroeconomic signals and institutional inflows. With leverage flushed out and risk appetite returning, the stage appears set for a more sustainable uptrend—provided global trade tensions remain contained.