Bitcoin Soars Beyond $114K, Ethereum Spikes 6% as US-China Tensions Ease

The biggest crypto liquidation event might have been just a big misunderstanding.

Bitcoin’s price has awakened on Sunday afternoon, as the asset jumped by several grand to well over $114,000. Ethereum and most altcoins followed suit, with impressive gains over the past hour or so.

This came after reports that the Friday threats by US President Donald Trump might have been exaggerated, and the tension between Washington and Beijing is de-escalating.

Investors are waking up to some major news from China:

The entire tariff crash on October 10th may have just been one big misunderstanding between Trump and Xi.

The news about China’s rare earth export controls came out on October 9th at ~8:30 am ET, 26 hours BEFORE Trump…

— The Kobeissi Letter (@KobeissiLetter) October 12, 2025

The Kobeissi Letter suggested that the US may have misinterpreted news about China’s rare earth export controls. After the tariff announcement by Trump on Friday, Beijing said the new controls are not a full export ban and applications that “meet regulations” will be approved.

“Amid the market’s downturn on Friday, our view was that the 100% tariff announcement by Trump was a bargaining chip. After China’s statement last night, we believe the odds of Trump’s 100% tariff on China going into effect are extremely low,” said the analysts.

Thus, they concluded that the biggest liquidation event in the cryptocurrency industry, which saw more than $19 billion wrecked in less than a day, “appears to have been driven by one big misunderstanding.”

US VP JD Vance continued the de-escalation on Sunday, saying their side appreciated the “friendship between Trump and Xi” and added that the POTUS hopes the US “won’t need to use ‘leverage’ on China.” Vance noted that Trump is “willing to be a reasonable negotiator with China,” which appears to be the catalyst behind the Sunday jump in the crypto markets.

BTC stood below $112,000 earlier today, prior to the news coming out, but shot up by over two grand to tap $114,500 before it retraced slightly. The asset is now up by over ten grand since the recent low marked on Saturday morning.

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The altcoins followed suit, led by ETH’s impressive surge to almost $4,100. BNB has rocketed by more than 12% daily and trades close to $1,300. Other big gainers include MNT (25%), TAO (18%), ASTER (16%), and PENGU (10%).