Cryptocurrency Market Revived by Macro Tailwinds…Will the Rebound Continue, or is it a Temporary Rally?

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The cryptocurrency market rebounded in just one day, but the market's attention remains focused on macroeconomics. Analysis suggests that this surge is more of a 'relief rally' driven by expectations of a dovish stance from the US Federal Reserve (Fed) rather than inherent positive news for cryptocurrencies themselves.

According to the cryptocurrency market data site CoinMarketCap on July 6 (local time), the total cryptocurrency market capitalization rose by 1.48% over 24 hours to $2.2 trillion. This increase was analyzed as a reflection of expectations regarding changes in the US Federal Reserve's interest rate outlook. Recent remarks by Fed Chairman Kevin Warsh, suggesting that inflation risks are easing, alleviated concerns about further tightening. Consequently, risk assets like Bitcoin and gold prices showed a concurrent upward trend. The correlation coefficient between the cryptocurrency market and gold prices over the past week recorded 86%.

The expansion of institutional investment also supported investor sentiment. DekaBank of Germany announced its plan to offer cryptocurrency services to approximately 50 million customers, which acted as a positive catalyst. Technically, the market rebounded after confirming support near its 30-day low of $2.04 trillion and is currently testing the $2.14 trillion mark, where the 7-day simple moving average is located.

However, it is still uncertain whether this rebound will lead to a sustained bull market. The media analyzed that since this rebound is based on macroeconomic expectations rather than strong intrinsic positive news for cryptocurrencies, the upcoming Federal Open Market Committee (FOMC) minutes and US Consumer Price Index (CPI) results will be key variables in determining the market's direction. In particular, it was assessed that if the market breaks above the Fibonacci retracement 23.6% level of $2.21 trillion, the upward momentum could strengthen.

Conversely, if the Fed sends hawkish signals again or economic indicators come out stronger than expected, this rally could be short-lived. The market is watching the $2.21 trillion to $2.27 trillion range as a short-term resistance level, and the media predicts that if it falls back below $2.09 trillion, the current short-term upward structure could be compromised.

*Disclaimer: This article is for informational purposes only and does not take responsibility for investment losses based on it. The content should be interpreted solely for the purpose of providing information.*