After a bloodbath on Satoshi Street on Monday, August 5, the broader crypto market is staging a good recovery with the Bitcoin price gaining above $55,400 at 8% from yesterday’s low and other ALTs gaining anywhere between 5-10%.

After crashing a massive 13% on Monday, August 5, Japan’s Nikkei 225 Index has bounced back strongly surging more than 10% in the early trading hours on Tuesday. Thanks to the strong recovery in the US futures market building some hope into the gloomy market.

Crypto Market Recovery Revives Hopes

Japanese equity market bounced back strongly on Tuesday, with the top two indices – Nikkei and Topix – gaining 12% each earlier today. The bounceback in the US futures market prevented another freefall in the Japanese market as well as the crypto market. Tomo Kinoshita, a global market strategist at Invesco Asset Management in Tokyo said:

“As Japanese equities rebound, the rest of the Asian markets are likely to rebound together today. As the magnitude of Japan’s stock price decline yesterday turned out to be much more than Europe and the US, the market participants now recognize that Japan’s market correction yesterday was excessive.”

Crypto investors took this opportunity with many buying the dips as predicted by banking giant JPMorgan. Bitcoin is up 3% covering above its crucial support levels of $54,000. From yesterday’s lows of under $50,000, the BTC price has covered up by more than 10% as market veterans like Michael Saylor showed confidence in HODL Bitcoins.

The surge in the Yen caused an unwinding of the Japanese carry trade, creating a major mayhem in global equities over the last three trading sessions. This led to the fears of things quickly spiraling into a US recession.

Also Read: Bitcoin Leads Crypto Outflow With $400M Lost Amid Recession Fears

Fed Rate Cut Soon?

Earlier there were reports of a Fed emergency meeting for the US central bank to intervene amid the collapsing global market and announce rate cuts. However, despite this not being the case on Monday, the US market staged a strong recovery as the US recession fears abated to a great extent with the PMI hitting 51.4 and the employment numbers being on the trajectory of improvement.

Thus, the possibility of a forced intervention by the Fed seems unlikely at this stage. However, the expectation of a 50 basis points rate cut in September has surged to 100%.

Markets are now pricing in a near 100% probability of a 50 basis point Sept. rate cut. I think that comfort caused a knee-jerk reaction to buy the dip. But that’s too little, too late, especially when any hotter than expect #inflation data could lower those odds. Sell the rip!

— Peter Schiff (@PeterSchiff) August 5, 2024

Amid the recent crypto market recovery, Bitcoin and Ethereum remain to be investors preferred choices as they prove to be safe haven assets in the crypto space.

Also Read: Bitcoin ETF: Europe’s Capula Management Discloses $500 Mln Holding

The post Crypto Market Recovering From Steep Correction, Here’s Why appeared first on CoinGape.

---

Filed under: News - @ August 6, 2024 4:19 am