Crypto markets saw a significant uptick on Monday, with Bitcoin (BTC) surpassing $84,000, as positive sentiment from U.S. stock markets extended its influence, buoying risk assets across the board. The largest cryptocurrency saw a notable gain, as the broader crypto market rose by 1.8%.
The CoinDesk 20 Index, which tracks the performance of major cryptocurrencies, outperformed with a 2.4% increase during the same period. Ethereum’s ether (ETH) also experienced a solid rise, trading 2.8% higher and stabilizing above the $1,900 mark. Several altcoins, including SUI, AAVE, ICP, and NEAR, posted strong performances, each rising by more than 5%.
Solana (SOL) joined the upward trend with a 3% increase, in line with the broader market movement, despite the launch of SOL futures on the CME, a platform focused on institutional investors, which failed to have a significant impact on market sentiment.
Meanwhile, Ethena’s governance token (ENA) surged by 7% following news of a partnership with tokenized asset issuer Securitize. This collaboration aims to bridge the gap between decentralized finance (DeFi) and traditional institutions by developing a proprietary blockchain.
The rally in cryptocurrencies was largely supported by the positive momentum in U.S. stock markets, which continued into this week. However, Joel Kruger, a strategist at LMAX Group, cautioned that the S&P 500 monthly chart suggested the potential for a sustained correction in U.S. equities, which could put downward pressure on cryptocurrencies.
He highlighted global trade tensions, concerns over a slowing U.S. economy, and uncertainties surrounding the Federal Reserve’s future actions as contributing factors to potential volatility. Kruger pointed to the possibility of Bitcoin revisiting its March 2024 peak around $73,000 to $74,000.
Despite these risks, many market participants expect the Federal Reserve to hold rates steady at its upcoming meeting. David Duong from Coinbase Institutional noted that the Fed could potentially end its quantitative tightening (QT) program, which would provide a boost to financial markets.
Duong speculated that the recent crypto market selloff was largely driven by macroeconomic concerns and liquidity issues but suggested that conditions could improve, setting the stage for a recovery in the coming months.
