Asian stock markets and futures rebounded strongly on Tuesday, August 6, after one of their steepest falls in years during Monday’s trading session. Against this background, many cryptocurrencies, led by Bitcoin, showed recovery.
Image Source: Behnam Norouzi/Unsplash
Bitcoin (BTC) rose above $56,000, up 6% and posting its biggest daily gain since early May. As CoinDesk reports, Bitcoin was followed by other cryptocurrencies: Ethereum (ETH) and XRP grew by 8%, BNB Chain (BNB) by 12%. Solana (SOL) is leading the recovery with a 16% gain. The CoinDesk 20 Index (CD20), which includes the largest tokens by market capitalization (excluding stablecoins), rose 7.26%, with more than $95 million in trading volume.
On Japan’s Topix stock exchange, the index soared about 10% as the yen weakened against the dollar, snapping five days of gains. S&P 500 index futures rose 1.5% and Nasdaq 100 index futures rose 2.1%. Also, the emergence of hopes for a faster cut in interest rates by the US Federal Reserve after Monday’s collapse in global markets helped restore optimism among investors.
However, crypto market analysts remain cautious about the continued growth of major tokens. “We may see a corrective rebound in the price of Bitcoin,” Ruslan Lienkha, head of Cyprus-based cryptocurrency company YouHodler, told CoinDesk. “However, this growth is likely to be limited due to prevailing pessimism in global markets.”
He also noted that Bitcoin’s recent fall is not much worse than the decline in Japan’s Nikkei index, indicating that current sentiment is driven by external factors rather than problems within the crypto market. “It is unclear whether we are entering a bear market, but a lot will depend on the performance of stock markets this month,” Lienka added.
Let us remind you that on Monday, cryptocurrency and global stock markets experienced one of the deepest falls in recent years. The strong yen triggered a sell-off, exacerbating a decline that began amid geopolitical tensions in the Middle East. The Topix 100 index recorded its biggest decline since 2011. At the same time, the price of Bitcoin in yen on the Tokyo exchange bitFlyer fell by almost 15%, which is significantly more than its dollar price on Western exchanges.
Significantly, institutional investors also sold off their Bitcoin holdings through ETFs, leading to significant outflows. US-listed financial assets recorded net outflows of $168.4 million, totaling more than $300 million for the month.