Crypto Market Ready To Break Out As U.S.–E.U. Tariff Truce Nears?

The crypto market might have found a new sentiment driver: the U.S.–E.U. tariff truce. After months of tension, the U.S. and E.U. are reportedly closing in on a compromise that could limit tariffs to 15%. This is well below the 30% threat previously expected to kick in by August 1.

This potential U.S.–E.U. tariff deal is a big deal for risk assets. Easing trade pressure tends to lift investor sentiment, unlock capital, and trigger inflows into assets like Bitcoin and DeFi.

Crypto Market News: Risk-On Mood Returns

Crypto markets may be waking up again, not because of an ETF or a halving, but thanks to global trade policy.

This week, the U.S. and E.U. are reportedly closing in on a 15% tariff deal, a softer outcome than the 30% threat that had markets nervous.

A truce like this means lower costs for cross-border goods, and more importantly, less global risk. Bitcoin briefly touched $118,000, and equities surged too.

Why does this matter for crypto? U.S.–E.U. Tariffs are a macro risk lever.

When they rise, risk assets like crypto drop. When they ease, appetite for volatile plays returns. This kind of macro calm has historically pushed institutional inflows higher, including flows into Grayscale, Bitwise, and ETH/BTC spot ETFs.

Stablecoin Reserves Are Climbing Again

The first sign that crypto capital is preparing to move? Look at the exchange reserves of USDT and USDC.

USDT reserves on exchanges rose back to $39.07 billion, bouncing after a mid-July dip. Even though USDC reserves are still lower than late June, they have flattened around $7.8 billion.

This means stablecoins are being moved into exchanges, often a sign that buyers are ready to deploy.

Historically, when traders bring stablecoins back onto exchanges, market volatility tends to follow, especially around macro headlines.

If the U.S.–E.U. tariff truce is confirmed; these reserves may be the fuel that pushes Bitcoin and altcoins higher.

DeFi Volumes and TVL Hint at Rotation Potential

Even before the official announcement, DeFi TVL has been rising. According to DeFiLlama, total value locked has now hit $137.5 billion, showing signs of accumulation returning across protocols.

While the last 24 hours showed a slight -2.2% pullback, the bigger picture shows a steady climb since late June. This move is in sync with how DeFi usually reacts after big macro events with a lag.

In addition to that, the DEX volumes hit $20.9B in 24h, and perp trading is also heating up, with ~$19.9 billion in daily volume. All that shows optimism.

If U.S.–E.U. tariffs ease and risk flows return, we may see traders rotate from majors like BTC and ETH into DeFi tokens.

This pattern is due to the fact that DeFi tends to move faster and offer higher short-term yield.

Plus, most DEX-specific (DeFi) tokens are up week-on-week. And that’s the cue.

Crypto Market Reacts: Altcoin Season Getting Closer

According to CoinMarketCap’s Altcoin Season Index, we’re not in altseason yet. But we’re inching closer. The index score has moved up to 42/100, from 18 just a month ago.

Additionally, the altcoin market cap is showing signs of a breakout against BTC dominance.

Historically, altseason begins when capital flows down from BTC into smaller, higher-risk assets. The last time this index jumped was in July 2023: right after U.S. interest rate pauses and trade de-escalation with China and the E.U.

If the U.S.–E.U. tariff deal becomes official, and BTC holds above $118K, a 15–40% rally in altcoins is possible, based on past patterns.

BTC Moving With Stocks Again

Another bullish signal? Bitcoin’s correlation with the S&P 500 and Nasdaq is rising again.

This suggests that BTC is behaving more like a risk-on asset, not a store-of-value hedge. The chart below shows:

The chart shows the BTC and S&P correlation near 1.0, whereas the BTC and Nasdaq connect is also high. Yet, the BTC and Gold correlation is trending negative.

This supports the idea that crypto market traders are rotating out of safe havens like gold and into risk assets like crypto; a classic macro rotation we’ve seen during trade truce periods, like the current U.S.–E.U. tariff talks.

The crypto market is looking for a reason to move. This potential U.S.–E.U. tariff truce might be that reason.

If confirmed, this U.S.–E.U. tariff deal could act as a macro green light, kicking off a new wave of crypto inflows. Traders should watch for Bitcoin holding $118K, ETF inflow spikes, and altcoin momentum in the days ahead.