Bitcoin (BTC) has nearly regained the $80,000 mark, showing a recovery after falling below $75,000 late on Monday, which also boosted several significant cryptocurrencies.
Dogecoin (DOGE), BNB from the BNB Chain, XRP, and ADA from Cardano increased up to 10%, offsetting some losses incurred over the past 24 hours. The wider CoinDesk 20 (CD20) saw an increase of almost 9%.
Overall, the cryptocurrency market capitalization has decreased to levels reminiscent of early November last year, following Donald Trump’s victory, which had ignited a rally and pushed total valuation beyond a previously perceived resistance level.
Equity markets experienced a rebound late Monday as speculation about a potential tariff relief sent the S&P 500 soaring more than 7%, only for it to relinquish most of those gains after the White House dismissed the rumors as “fake news.”
On Monday, crypto-related futures saw over $1.2 billion liquidated as significant cryptocurrencies plummeted beyond 20% at one stage, setting the scene for a recovery as traders closed short positions and reversed excessive selling, as reported.
Traders are closely monitoring Bitcoin’s price movements for indications on buying the dip, although some express caution due to the uncertainty stemming from ongoing tariff conflicts.
“We’re hopeful that investors looking for safe havens may be inclined to buy the dip on Bitcoin if it can demonstrate relative strength against traditional assets during a projected recovery phase in the near term,” remarked Jupiter Zheng, a partner at HashKey Capital, via a Telegram message. “While global markets are undergoing unprecedented sell-offs, Bitcoin too has declined yet remains relatively stable.”
According to Alex Kuptsikevich, chief market analyst at FxPro, the market seems “emotionally oversold,” and while a bounce appears to be taking shape, the underlying drivers necessary for a real reversal are “still absent.”
“Crypto market sentiment has reverted to an extreme fear level of 23, which is considerably higher than what we observe in equities,” he mentioned in an email. “This doesn’t imply that cryptocurrency investors are more confident about the future. Instead, it indicates that the ongoing sell-off is more structured, which makes it more perilous.”