CoinDesk analyst Shaurya Malwa stated that despite a rebound in the cryptocurrency market, caution remains necessary. Earlier this week, the drop in Bitcoin, combined with reduced liquidity over the weekend and repercussions from macroeconomic market concerns, amplified price volatility. The market as a whole is still digesting concerns related to corporate balance sheets, notably the marked retreat of ETFs linked to strategy and the ongoing methodological revision of MSCI, all factors that have dampened risk appetite lately.
Tuesday's rise was fueled by several catalysts. The chair of the U.S. SEC, Paul Atkins, stated that the SEC plans to unveil a draft framework for an "innovation exemption" for digital asset companies, perceived by the market as a step towards regulatory clarity after months of stagnation. Furthermore, Vanguard Group announced this week that it would allow trading of cryptocurrency ETFs and mutual funds on its platform, thereby boosting market confidence after prolonged capital outflows.
However, the structure of this rebound indicates that it is primarily a relief rally rather than a trend change. The depth of the market remains uneven, with several major tokens rebounding after reaching lows over several weeks. The next test will be to determine if spot demand can support this recovery once the derivatives market has recovered from its liquidation phase.
