Cryptocurrency prices have entered a fresh bull market as the crypto fear and greed index moves from Monday’s fear zone to over 56. Bitcoin has helped this rebound, rallying over 10% in the last 24 hours.
Sui token helped to lead the recovery, rising to $0.8360, much higher than this week’s low of $0.4615. This rebound was mostly due to the ongoing crypto recovery and Grayscale’s recent decision to launch a Sui fund, which will give it access to more institutional investors.
Sei token rose by over 25% in the last 24 hours, reaching a high of $0.3025, up by almost 50% from its lowest point this week. Celestia’s TIA and Injective’s INJ tokens rose by over 20%. Bittensor (TAO), Brett, and Conflux were the other top performers.
Bitcoin price formed hammer and wedge patterns
There are five main catalysts for this rebound. First, from a technical aspect, most tokens formed a hammer candlestick pattern, a popular bullish sign. A hammer comprises a small body and a long lower shadow, and it mostly happens when an asset is in a downtrend. Bitcoin also formed a falling broadening wedge pattern, which resulted in a bullish breakout.
Second, the rebound happened as investors bought the dip as concerns about the unwinding of the Japanese yen carry trade faded. Indeed, the Japanese yen currency has softened by almost 4% from its highest point this month while global stocks have rallied. The S&P 500 index in the US rose by over 200 points on Thursday, its best day since 2022.
Potential Federal Reserve cuts
Third, traders have understood that a recession in the US is bullish for risky assets like cryptocurrencies and stocks. A recession, as we saw in 2020, would push the Federal Reserve to intervene and start cutting interest rates. Analysts at Jefferies expect the Fed to deliver a jumbo cut this month, with JPMorgan predicting 125bps cuts this year.
Fourth, the tokens are surging because of Ripple’s Thursday victory against the Securities and Exchange Commission. While the SEC requested $2 billion, the judge overseeing the case ordered it to pay $125 million.
Finally, this could be a dead cat bounce, where an asset in a freefall stages a temporary rebound. These bounces are highly common in the crypto and stock markets. In this case, a more sustained rally will be confirmed if Bitcoin clears the key resistance points at $70,000, $72,000, and the year-to-date high of $73,400.
