Cryptocurrencies are experiencing a significant rebound after Monday's crash. Since July 31, global markets have been under pressure, fearing a recession in the United States. Despite this situation, Bitcoin and Ether are showing significant gains.
Cryptocurrencies rebound strongly after Monday crash
In recent weeks, especially since July 31, when the Federal Reserve (FED) decided to keep its interest rates unchanged, global markets have been under strong downward pressure, fueled by fears of a recession in the United States.
In just one week, the S&P 500 has fallen by almost 8%, the Nikkei, the index of the Japanese economy particularly affected by recent events, has plummeted by 22%, while the price of Bitcoin has lost around 30% and that of Ether 37%.
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Many investors anticipated a consolidation in cryptocurrency prices, or even a further fall to new lows. However, Since its low of $49,250, BTC has rebounded by more than 27%, breaking back above $62,700..
Bitcoin price against the dollar
Currently, BTC seems to have started a short-term correction and is stabilizes around $61,000.
For its part, the price of Ether has climbed nearly 29% since its last low of $2,100 and is currently trading at $2,700..
The price of BNB, the token of the BNB Chain, is following a similar trajectory with a 29% rebound from $400, trading above $500 today. As for the price of SOL, the token of the Solana blockchain, it is recording a more marked increase of 48% from $110, trading around $160 today.
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How can we explain such a rebound?
Many factors can explain this recent rebound, including Investors' optimism about an imminent Fed pivot.
The recent rise in the US unemployment rate has likely triggered a short-term overreaction, fueling fears of an economic recession. However, Latest labor market statistics do not yet indicate a recessionbut rather serve as a warning.
Earlier this week, many economists and financial analysts called for an emergency rate cut by the Fed. Although this call did not bear fruit, The Federal Reserve Board appears to be in a difficult position, forced to cut rates to avoid a recession that could force businesses to cut production or even go bankrupt..
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In his latest analysis, Vincent Ganne, an analyst at Cryptoast Research, pointed out that the US economy is not in a recession, or even a technical recession, but simply in a pre-alert state. According to him, the Fed will pivot at the September 18 meeting, potentially with a double rate cut.
Additionally, he claims that a FED pivot, accompanied by dollar disinflation, would be beneficial for the cryptocurrency market, which could experience a favorable period during the coming fall and winter.
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Source: TradingView
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First attracted by the lure of gain, I am now trapped deep into the rabbit hole. With no way out, I have no choice but to share my knowledge and transmit the passion I have for the blockchain universe. I am also the creator of Adopt a Block, an educational site dedicated to Bitcoin.
Marius Farashi Tasooji
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