Crypto markets climbed higher on Monday, with Bitcoin (BTC) trading above $84,000, signaling another positive day for U.S. stocks that has propelled risk assets upward. The largest cryptocurrency experienced an uptick, contributing to a broader crypto market rise of 1.8%. The CoinDesk 20 Index slightly outperformed, advancing by 2.4% during the same period. Ethereum’s Ether (ETH) also stabilized above $1,900, marking a commendable 2.8% increase, while several altcoin majors, including SUI, AAVE, ICP, and NEAR, reported gains of over 5%.
In a similar vein, Solana edged up 3%, reflecting the broader market trend, even though the first day of SOL futures trading on the institutional-focused marketplace CME did not significantly influence investor sentiment.
Among the noteworthy movements, Ethena’s governance token (ENA) surged by 7% following the announcement of a new proprietary blockchain in collaboration with tokenized asset issuer Securitize, which aims to bridge decentralized finance (DeFi) and traditional financial institutions.
The positive momentum in key U.S. stock indexes this week has created a favorable environment for risk assets. However, LMAX Group strategist Joel Kruger expressed caution, indicating that the monthly S&P 500 chart suggests the potential for a prolonged correction in U.S. equities, which could negatively impact cryptocurrencies.
“When we consider the state of global trade tensions and concerns surrounding a slowdown in the U.S. economy—amid increasing uncertainty about how much additional accommodation the Fed can provide—there is genuine concern that stocks may experience further decline,” Kruger stated.
He cautioned that Bitcoin could potentially revisit a lower low, approaching the peak of $73,000-$74,000 observed in March 2024.
Market participants are largely anticipating that the Fed will maintain its current rates during this week’s Federal Open Market Committee meeting. However, investors should remain vigilant regarding any adjustments to the central bank’s balance sheet runoff or quantitative tightening (QT) measures, according to David Duong, head of research at Coinbase Institutional.
“We believe the Fed may either pause or conclude its QT program this week, as bank reserve levels approach the 10-11% of GDP threshold typically deemed adequate for ensuring financial stability,” Duong remarked in a recent report.
Duong further noted that the recent downturn in the crypto market was predominantly driven by macroeconomic concerns and a deterioration in liquidity conditions. He speculated that conditions could improve in the next quarter, providing a supportive backdrop for asset prices. “Crypto prices might find their bottom in the coming weeks before rebounding to new heights later this year,” he concluded.
