Cryptocurrency Market Rebound…Is it a real bull market or an effect of the US stock market?

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The rebound in the cryptocurrency market was not driven by internal industry good news, but by the US stock market and liquidity flows. With a correlation coefficient of 89% with the S&P 500 index, Bitcoin (BTC) maintained $63,000, and the total market capitalization rose to $2.19 trillion.

According to the cryptocurrency market aggregator CoinMarketCap on August 5 (local time), the total cryptocurrency market capitalization increased by 0.82% over 24 hours. During the same period, the market showed an 89% correlation with the S&P 500 index, closely tracking the trends of the US stock market. Analysis suggests that this rise originated from a preference for risk assets sensitive to interest rates and liquidity, rather than from inherent cryptocurrency-specific positive news.

Some altcoins showed strong speculative buying. Squid (QUID) surged by 157%, and Coti (COTI) jumped by 24% amid traders' expectations of a momentum breakout. However, the Altcoin Season Index fell to 45, indicating that the uptrend was concentrated in a few specific assets rather than a broad market rotation.

In the short term, the total market capitalization is facing resistance at the 38.2% Fibonacci retracement level of $2.22 trillion. A breakout above this price point on a closing basis could lead to a rise to $2.26 trillion, while the recent low of $2.15 trillion has been identified as a key support level. A break below this could intensify bearish pressure.

The market outlook was assessed as 'cautious neutral.' Short-term upward momentum can only be confirmed if the S&P 500 exchange-traded fund (SPY) maintains its strength above $770 and Bitcoin recovers to $64,000. Conversely, if the US stock market falters or BTC drops below $63,000, this rebound could remain a limited accompanying rise in risk assets. The market is paying close attention to the US July employment report, to be released on August 7.

*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.*