The Calm Before the Storm ?
The recovery of the cryptocurrency market closely aligns with that of the US stocks, amidst economic uncertainty ahead of Trump’s Independence Day. The American president is set to unveil new protectionist measures that could impact global growth.
Despite these trade tensions, investors seem to be cautiously optimistic. Bitcoin has gained over 3% to climb back above $84,000, while Ethereum surpassed $1,800. This positive trend is also seen in altcoins, with increases of over 6% for DOGE and Cardano.
According to analysts, this surge reflects a “breather” before a possible storm as investors position themselves ahead of Trump’s decisions. Although the outcome of the trade conflict remains uncertain, a more favourable scenario than expected could provide a much-needed reprieve for the markets.
Encouraging Capital Inflows for Cryptocurrencies
Beyond short-term fluctuations, investment flows into crypto funds remain overall positive. Over the past week, these products have recorded $226 million of inflows following five consecutive weeks of outflows.
This trend reflects the ongoing confidence of institutional investors in digital assets, albeit in a “cautious” approach, according to analysts at CoinShares. Bitcoin notably attracted $197 million, while altcoins saw capital inflows for the first time in five weeks.
From a technical standpoint, the cryptocurrency market also shows encouraging signals. After dipping into oversold territory, the Relative Strength Index (RSI) suggests a resurgence of buyers to absorb selling pressure. Moreover, the formation of a potential double bottom hints at a consolidation and a more sustainable recovery.
