Bitcoin and most altcoins experienced growth on Wednesday, fueled by investor optimism surrounding upcoming US-China trade talks and a decline in crude oil prices, preceding the Federal Reserve's interest rate decision.

Bitcoin (BTC) reached $97,000, its highest point since February, resulting in a market capitalization exceeding $1.92 trillion. Leading altcoins, including Stacks (STX), Flare (FLR), JasmyCoin (JASMY), and Dogecoin (DOGE), saw increases exceeding 3%.

The rally's primary catalyst is the planned meeting between high-level US and Chinese officials in Switzerland. These talks aim to ease tensions following the imposition of substantial tariffs in April. Reports suggest China is considering measures to curb the flow of fentanyl precursor chemicals, while the US may reduce tariffs on Chinese goods.

While this meeting represents positive progress, analysts anticipate a lengthy negotiation process, with estimates suggesting a final agreement could take up to three years.

The rise in altcoins like Stacks, Flare, Jasmy, and Dogecoin also correlated with the continued decrease in crude oil prices. Brent and West Texas Intermediate crude fell by 0.35%, reaching $61 and $58 respectively.

The prospect of a trade deal and falling oil prices suggests a slower rise in inflation and a reduced likelihood of a US recession. Indeed, data from Polymarket indicates that the probability of a US recession has decreased from 62% in April to 51%.

Stacks, Flare, Jasmy, and Dogecoin price increases preceded the Fed decision. These altcoins also rallied ahead of the Federal Reserve's interest rate decision. Economists largely predict the Fed will maintain interest rates at 4.50%.

The Fed Chair, Jerome Powell, has consistently reiterated that rate cuts will only be considered if inflation approaches the 2.0% target and that the impact of new tariffs on inflation will be carefully assessed. An analyst's comment to Bloomberg described Powell's statements as potentially "dovish relief for investors."

Historically, Bitcoin, altcoins, and equities have generally performed well when the Federal Reserve reduces rates or signals future reductions. The rally during the COVID-19 pandemic, followed by the 2022 correction during the Fed's aggressive rate hikes, serves as a clear example.