Bitcoin and altcoins recover losses, but economic uncertainty and regulatory concerns continue to weigh on the market.
Bitcoin Bounces Back From Sharp Declines
After Monday’s trade war-induced sell-off, the crypto market rebounded Tuesday, with Bitcoin climbing above $86,900. The flagship cryptocurrency remains 20% below its all-time high, while Ethereum also saw minor gains.
Altcoins React to Market Sentiment
- XRP (+1.8%) and Cardano (+4.6%) gained following Trump’s “strategic crypto reserve” announcement.
- Solana remains in the red, struggling despite previous momentum.
- Stocks tied to Bitcoin, like Coinbase and MicroStrategy, also posted gains.
Macroeconomic Pressures Weigh on Market
- Tariffs and inflation concerns spooked traditional markets, impacting risk assets.
- Monday’s sell-off led to $251M in Bitcoin liquidations and $146M in Ethereum liquidations, according to CoinGlass.
- Analysts suggest crypto traders may have priced in macro risks ahead of equities.
Regulatory Uncertainty Remains a Concern
Despite optimism surrounding Trump’s crypto reserve, analysts warn of volatility due to uncertainty over how much crypto the U.S. will buy. Deutsche Bank noted:
“The lack of information on the amount of crypto the U.S. government will buy, and how the purchase will be funded… means that the likelihood of high volatility in the crypto markets will continue.”
Eyes on White House Crypto Summit
Investors are now looking ahead to Trump’s inaugural Crypto Summit on Friday, which may provide clarity on U.S. crypto policy and a potential regulatory framework.
Disclaimer:
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