to leave a comment.
▲ Cryptocurrency ©
The cryptocurrency market has rebounded as easing regulatory uncertainty in the U.S. coincided with Bitcoin (BTC) defending its $62,000 support level. Expectations that regulatory risks surrounding major cryptocurrencies such as Ethereum (ETH) and XRP (Ripple) will diminish are considered a key driver in boosting investor sentiment.
According to CoinMarketCap, a cryptocurrency market data aggregator, on August 3 (local time), the total cryptocurrency market capitalization rose by 1.53% over the past 24 hours, reaching $2.18 trillion. The correlation between the cryptocurrency market and gold also stood at 71%, suggesting a simultaneous inflow of investment demand for inflation-hedging assets.
The primary reason for the market rebound is the joint framework established in March by the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC). This framework classified 16 major cryptocurrencies, including Bitcoin, Ethereum, and XRP, as 'digital commodities,' reducing uncertainty related to securities laws for exchanges and institutional investors. Ripple's CEO also mentioned the possibility of XRP reaching an all-time high on CNBC, leading to strong optimism in related investor sentiment.
Technically, Bitcoin's repeated defense of the $61,500-$62,000 support zone since July, absorbing selling pressure, contributed to market stability. Furthermore, Robinhood reported a record $1.31 billion in revenue in the second quarter, indicating robust participation from retail and institutional investors in financial investment platforms, despite a direct decrease in cryptocurrency revenue.
The short-term direction of the market hinges on whether Bitcoin defends the $62,000 level and the U.S. Consumer Price Index (CPI) report to be released on August 12. If inflation slows, concerns about interest rate hikes may ease, allowing the uptrend to continue. However, if Bitcoin falls below $62,000, there is a possibility of cascading liquidations and a retest of the $58,000-$60,000 support zone. Consequently, market sentiment leans towards 'cautious optimism' rather than outright bullishness.
*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.*
Newsletter
Get key news delivered to your email every morning
to leave a comment.