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▲ Ethereum (ETH), Solana (SOL)/ChatGPT generated image ©
The cryptocurrency market rebounded by 1.32% in a single day, recovering its market capitalization to $2.13 trillion. This surge was driven by the strength of major Layer 1 ecosystems, particularly Ethereum (ETH) and Solana (SOL), rather than a sharp rise in Bitcoin (BTC). The main underlying factor was a resurgence of risk asset appetite across the market.
According to CoinMarketCap, a cryptocurrency market data aggregator, on July 3 (local time), the total cryptocurrency market capitalization increased by 1.32% over 24 hours, reaching $2.13 trillion. The uptrend was led by major Layer 1 ecosystems, including Ethereum, Solana, and BNB Chain. The Ethereum ecosystem rose by 15.15%, the Solana ecosystem by 23.34%, and the BNB Chain ecosystem by 28.49%, indicating a shift of market funds towards large-cap altcoins.
The media cited the rotation of funds into major altcoin ecosystems as the biggest reason for this surge. It explained that market participants' preference for risk assets expanded as they focused on buying large Layer 1 projects with strong fundamentals and ecosystems, rather than highly speculative memecoins. However, for this trend to continue, Ethereum needs to maintain its recent 7-day high, and the number of rising assets across the market must continue to expand, the analysis stated.
The macroeconomic environment also played a favorable role in the market. Kevin Warsh, a former Federal Reserve (Fed) governor, mentioned the possibility of inflation easing, suggesting that the likelihood of further benchmark interest rate hikes could decrease, which supported investor sentiment. Additionally, Bitcoin's 2.7% rise over the past week, maintaining market stability, provided a foundation for funds to spread into altcoins, the media explained.
However, analysis suggests that it is still necessary to confirm whether this rebound will lead to a sustained uptrend. The media assessed that the overall cryptocurrency market capitalization needs to break through the $2.18 trillion resistance level for the upward trend to truly begin. Conversely, if it falls back below $2.04 trillion, this rebound could end in failure, increasing the possibility of retesting the year's lows.
The biggest variable for the market going forward is the US Consumer Price Index (CPI) to be released on July 10. The media predicted that since this rally reflects expectations of easing inflation, if the CPI comes out higher than market expectations, the current risk asset appetite could quickly weaken. Ultimately, for this rebound to be sustained, the improvement in the macroeconomic environment and the continued upward momentum of major altcoins will be key factors, the analysis concluded.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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