Foreign media reports that the cryptocurrency market rebounded despite lingering bearish pressure. Bitcoin climbed back above $65,000, and Ethereum continued its upward trend. The article argues that this rally is more likely a short-term recovery in risk appetite than a complete trend reversal.
Funds may shift to crypto assets after stock market correction.
The article mentions that US stocks have recently retreated after profit-taking, and some funds may be shifting to the crypto market. Major crypto assets generally rose that day, indicating a change in the allocation of funds within risk assets.
According to CoinGecko data, Ethereum rose 4.2% in the last 24 hours, once again approaching the $2,000 mark. Bitcoin, meanwhile, recovered to the $65,000 level, driving a recovery in overall market sentiment.
- Bitcoin returns above $65,000
- Ethereum rose 4.2% in the last 24 hours.
- Major crypto assets generally rose on the day.
The decline in US inflation has led to expectations of interest rate cuts.
The article argues that the decline in the US Consumer Price Index (CPI) in June was also a significant factor contributing to the market rebound. The CPI fell to 3.5%, the largest drop since April 2020, reigniting market expectations for interest rate cuts.
In an environment where interest rates are likely to decline, funds are typically more inclined to allocate to more volatile assets. Cryptocurrencies often benefit from this resurgence in risk appetite, hence the market's increased acceptance of short-term rebounds following the release of inflation data.
Oil prices and geopolitical tensions continue to weigh on the market outlook.
However, the article also points out that the current negative factors have not disappeared. The conflict between the US and Iran has pushed up oil prices, which may raise inflation in July. If energy prices continue to rise, the Federal Reserve's policy path this year may also tighten again.
Once the market re-bets on higher interest rates, risk assets could come under renewed pressure, and the crypto market will likely be no exception. The article also notes that retail investor risk appetite remains weak, and the emotional foundation for a full recovery is not solid.
The author believes that a de-escalation of tensions between the US and Iran could provide more significant support for market sentiment. However, given the current situation, a final peace agreement has not yet been reached, meaning that the cryptocurrency market's rebound still faces external uncertainties.
