The cryptocurrency market has staged an impressive rebound, with its total market capitalization reaching $2.96 trillion after a 1.5% surge in the past 24 hours. Leading digital assets have posted notable gains, including Bitcoin (BTC) up 2.7%, Ethereum (ETH) rising 1.6%, XRP jumping 3.2%, Solana (SOL) climbing 3.2%, and Dogecoin (DOGE) advancing 2.9%. But what has triggered this resurgence? Let’s explore the key factors fueling this rally.
Trump’s Tariff Delay Boosts Market Sentiment
A major catalyst for the crypto market’s rebound is the delay in U.S. President Donald Trump’s proposed 25% tariff on auto imports from Canada and Mexico. The initial announcement raised fears of a trade war, rattling both traditional and digital markets. However, following discussions with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum, Trump agreed to a 30-day postponement. This temporary resolution has reduced macroeconomic uncertainty, restoring investor confidence and positively impacting the crypto sector.
Stock Market Gains Provide Additional Momentum
The U.S. stock market’s positive performance has also contributed to the crypto rally. The S&P 500 index climbed 1.05%, rising from $5,781.50 to $5,842.62. This surge extended to crypto-related stocks, with MicroStrategy soaring 11.17% to $308.55 and Coinbase Global advancing 3.63% to $222.45. Historically, bullish movements in equities often translate to increased risk appetite, benefiting digital assets like Bitcoin and altcoins.
Weaker U.S. Dollar and Interest Rate Speculation
Over the past four days, the U.S. Dollar Index (DXY) has weakened by 3.21%, reflecting concerns about economic stability. A declining dollar often pushes investors towards alternative assets such as cryptocurrencies. Additionally, with inflation concerns persisting, market participants anticipate a potential Federal Reserve rate cut in June 2025, currently priced at a 52% probability. Lower interest rates typically encourage investment in riskier assets, further bolstering crypto demand.
From a technical perspective, the market’s current total cap of $2.96T remains above the 200-day Simple Moving Average (SMA) at $2.79T, signaling strong support. However, resistance levels lie ahead, with the 50-day SMA at $3.19T and the 100-day SMA at $3.28T. If the market successfully breaches these thresholds, a sustained bullish rally could follow. Meanwhile, the Relative Strength Index (RSI) at 47.58 suggests there is ample room for further upward momentum.
Also Read: Ethereum Sees $20M Spot Inflows After 10-Day Outflow Streak – What’s Next for ETH?
The crypto market’s rebound is driven by a combination of geopolitical developments, stock market gains, monetary policy speculation, and bullish technical indicators. If these factors continue aligning in favor of digital assets, the market could be on the verge of a significant breakout.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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