The Crypto Markets Shake Off the Shackles of Uncertainty

Bitcoin Rebounds Sharply as Risk Appetite Returns

The crypto market is shaking off the shackles of uncertainty, rising nearly 4% from its low of $2.54T at the start of Asian trading to $2.63T at the time of writing, 2.3% above yesterday’s level. This is an impressive intraday reversal, comparable to what we saw in 2020 and 2024 following the US presidential elections: consolidation or a decline shortly before the elections was followed by steady growth for weeks once the situation became clearer. The latest surge suggests that markets are not particularly afraid of the Democrats, only of uncertainty.

Bitcoin fell to a daily low of $75.7K but quickly reversed course, rising nearly 4% from that low as risk appetite in the equity market increased and the US dollar weakened. The leading cryptocurrency found support in the same area where we saw a reversal in mid-September, avoiding a drop towards the $73K–$75K range, where the 200-day moving average and recent local lows are concentrated. However, it is still too early to confirm a reversal, as this would require a rise above $82K, near which the 50-day moving average and the most recent local high are located.

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The market capitalisation of stablecoins has fallen to $263 billion, its lowest level in over a year. There is virtually no fresh capital flowing into the crypto market. Investors are being put off by a spate of hacks in the crypto industry, tense geopolitical conditions and economic instability.

Ethereum reserves on crypto exchanges have fallen to their lowest level since 2016, according to CryptoQuant. This eases selling pressure and, should buyers return, could accelerate the asset’s growth.

The crypto market’s muted reaction to the multi-billion-dollar hack of Binance suggests that the asset sell-off cycle has come to an end, said Tom Lee, Chairman of Bitmine.

The US SEC has clarified the status of governance tokens such as Uniswap. A token will not be considered a security if the network is genuinely decentralised. This clarification may allay the main concerns of participants in the decentralised finance (DeFi) sector.

The number of active addresses on the XRP Ledger has risen by 132% over the past month, indicating continued user activity despite the fall in XRP’s price, according to Santiment.

The FxPro Analyst Team