What to know:
- Bitcoin has bounced back to nearly $80,000 after falling below $75,000, boosting other significant cryptocurrencies.
- The total cryptocurrency market capitalization has returned to levels observed last November, coinciding with Donald Trump’s election victory.
- On Monday, crypto futures suffered over $1.2 billion in liquidations, which helped the market recover as traders adapted their positions.
Bitcoin (BTC) surged back to nearly $80,000, marking a relief rally after dipping below $75,000 late on Monday, leading to gains in prominent cryptocurrencies. Dogecoin (DOGE), BNB Chain’s BNB, XRP, and Cardano’s ADA saw increases of approximately 10%, alleviating some losses from the previous 24 hours. The broader CoinDesk 20 (CD20) index rose by nearly 9%.
Overall, the cryptocurrency market capitalization has retreated to levels last seen in early November of the previous year, at the time of Trump’s victory, which spurred a rally that broke through resistance levels.
The equities market also had a strong day on Monday as speculation regarding a potential tariff relief drove the S&P 500 up by over 7%, although it later retracted most gains after the White House labeled the news “fake.”
The crypto-focused futures market saw over $1.2 billion liquidated as major cryptocurrencies plummeted by more than 20% at one point, creating conditions for a rebound as traders closed short positions and reversed excessive selling, according to CoinDesk.
Traders are watching Bitcoin price patterns for signals regarding dip purchases, with some expressing caution due to uncertainties surrounding tariff disputes.
“We’re optimistic that investors seeking safe havens may look to buy the dip on Bitcoin if it can demonstrate some relative strength against traditional assets during an eventual recovery period in the short term,” said Jupiter Zheng, a partner at HashKey Capital, in a Telegram message. “While global markets are experiencing record sell-offs, Bitcoin has also declined but remains relatively stable.”
Alex Kuptsikevich of FxPro noted, “The market appears emotionally oversold, and while a rebound is underway, the necessary catalysts for a true reversal are not yet in place.”
He further commented, “Crypto market sentiment has reverted to the extreme fear zone of 23, significantly higher than what we observe in the stock market. This does not imply that cryptocurrency investors feel more confident about the future; rather, it suggests that the sell-off in crypto has been more organized, which makes it riskier.”
