Leading cryptocurrencies made a significant recovery on Tuesday after a period of heavy sell-offs that had driven prices to an 8-week low the previous day. Bitcoin, Ethereum, and Dogecoin all saw notable gains, marking a rebound from Monday’s losses.
Bitcoin, the most well-known cryptocurrency, experienced a steady climb throughout the day. By the evening, it had briefly risen above the $62,000 mark, eventually settling at $61,798.16, which was a 2.42% increase. This relief rally came after Bitcoin had dipped below $60,000 on Monday, driven by concerns over Mt. Gox’s repayment plans. The resurgence indicated renewed buying pressure, stabilizing the market after a volatile start to the week.
Ethereum also saw a positive movement, rising by 1.36% to $3,393.50. The uptick in Ethereum’s price was seemingly boosted by comments from SEC Chair Gary Gensler about the smooth progress of the review of spot ETFs. This optimism helped drive renewed interest and buying activity in Ethereum.
Dogecoin, often considered a meme cryptocurrency, showed the most substantial gain among the leading cryptocurrencies, jumping by 6.22% to reach $0.1264. The significant increase in Dogecoin’s value underscored the broader recovery across the cryptocurrency market.
Over the last 24 hours, a substantial number of traders were liquidated, with total liquidations reaching $87.59 million. This involved 32,307 traders, with short liquidations accounting for 64% of the total. This large-scale liquidation likely contributed to the volatility and subsequent recovery as the market adjusted.
Bitcoin’s Open Interest, a measure of the total number of outstanding derivative contracts, rose by 0.19% over the past 24 hours. This increase suggests that new money was entering the market, signaling investor confidence and a potential buildup for future price movements. Despite this, there was a notable rise in bearish bets against Bitcoin compared to bullish positions within the same period.
Market sentiment showed a significant shift towards optimism, with the Cryptocurrency Fear & Greed Index increasing from 30 to 46. While the overall sentiment was still categorized as “Fear,” the improvement indicated a recovery in market confidence.
Several lesser-known cryptocurrencies also saw impressive gains. Stacks (STX) rose by 12.82% to $1.79, Brett (BRETT) increased by 12.41% to $0.1651, and dgwifhat (WIF) jumped by 12.29% to $2.05. The overall global cryptocurrency market cap expanded by 2.06% over the last 24 hours, reaching $2.28 trillion.
The stock market also rebounded strongly on Tuesday after a series of negative trading days. The S&P 500 gained 21.43 points (0.39%), closing at 5,469.30. The tech-heavy Nasdaq 100 surged by 1.26%, ending the day at 17,717.65. In contrast, the Dow Jones Industrial Average closed 0.76% lower at 39,112.16. The significant uptick was primarily driven by a 6.7% jump in shares of AI giant NVIDIA Corp. (NASDAQ: NVDA), which has been a major market catalyst. NVIDIA’s decline on Monday had pulled the broader market index and tech stocks down.
Analysts are now focusing on May’s personal expenditure data, set for release on Friday. This data is considered the Federal Reserve’s preferred measure of inflation and could significantly influence market sentiment and future price movements.
Widely followed analyst Ali Martinez suggested that the current market dip is an opportune moment to buy Bitcoin. He based his assertion on the Relative Strength Indicator (RSI), which is currently in the oversold territory. Historically, such conditions have often preceded significant price increases for Bitcoin.
Popular cryptocurrency trader Rekt Capital noted that Bitcoin is continuing to consolidate within the “post-halving re-accumulation range.” He identified the range high resistance at around $71,500 and the range low at approximately $60,600.
As the market continues to recover, investors are closely watching for further developments and potential buying opportunities in the cryptocurrency space. The recent rebound has provided a glimmer of hope and a reminder of the market’s inherent volatility and potential for rapid recovery.