On Monday, the cryptocurrency market experienced a noteworthy rebound, with leading digital assets such as Bitcoin and Ethereum recovering alongside traditional equities and precious metals. This shift in sentiment signals a growing risk appetite among investors, as they react to recent market fluctuations.
In the past 24 hours, Bitcoin registered a gain of 1.93%, reaching a price of $78,710.27. Meanwhile, Ethereum saw an increase of 2.72%, settling at $2,341.12. Other cryptocurrencies, including XRP and Dogecoin, also followed suit, posting gains of 1.09% and 3.30% respectively. Solana also recorded a significant uptick, climbing 2.46% to $103.47.
This resurgence in the cryptocurrency market comes after a severe sell-off that effectively erased the gains achieved during the post-election rally. Notably, Bitcoin experienced a sharp increase in trading volume, surging by 35% as traders reacted to the changing market dynamics.
Despite the positive movement in cryptocurrency prices, shares of companies linked to the sector, such as Strategy Inc. and Bitmine Immersion Technologies, saw declines of 6.73% and 9.16%, respectively. This reflects a mixed sentiment within the broader market.
According to data from Coinglass, over $550 million was liquidated from the cryptocurrency market in the last day, with long liquidations comprising the bulk of this figure. A significant risk looms for over $300 million in Bitcoin short positions, which could face liquidation if Bitcoin manages to rebound to $85,000.
The current market sentiment remains one of “Extreme Fear,” as indicated by the Crypto Fear & Greed Index, underscoring the cautious mood prevalent among investors.
In the context of broader market performance, the global cryptocurrency market capitalization reached $2.65 trillion, reflecting a 2.27% increase over the past 24 hours. Traditional stock markets, too, began the new trading month positively, with the Dow Jones Industrial Average gaining 515.19 points, or 1.05%, while the S&P 500 and Nasdaq Composite also closed higher.
In a recent analysis, blockchain analytics firm CryptoQuant identified “clear signs” of a potential bear market for Bitcoin, noting that the percentage of supply in loss has now exceeded 44%. Such indicators typically suggest the onset of bear market conditions rather than a healthy pullback.
However, prominent cryptocurrency analyst Michaël van de Poppe expressed a more optimistic outlook, forecasting a strong bull market for the next 1 to 2 years. He highlighted that Bitcoin“s performance might not peak when the U.S. Manufacturing Index dips below 50, drawing parallels to the early stages of previous bull cycles.
As the cryptocurrency landscape continues to evolve, market participants will be closely monitoring these developments for signs of sustained recovery or further volatility.
