Bearish news confirmed—market rally ignites! BTC surged to $86,000 and the crypto community is seeing a new wave of rebound
A recent market research report released by GSR indicates that last week the total market capitalization of the crypto market rose by about 6%, reaching $2.9 trillion. The core logic behind this rebound is that the two major bearish news items that had previously been weighing on the market have already been fully digested by funds ahead of time.
On one hand, the U.S. CLARITY Act failed to pass after a procedural vote, with 49 votes in favor and 50 against, falling short of the 60-vote threshold; the near-term risk of tighter regulation is temporarily lifted. On the other hand, the Federal Reserve raised rates by 25 basis points as expected, bringing the policy rate to 3.75%-4.00%, which is the first rate hike since July 2023. Among 18 Fed officials, 16 believe there is a high probability of another rate hike within the year.
Before the event even landed, the market had already priced in the outcome. Before the vote, Polymarket gave the probability of the bill passing at only 29%; after the CPI data was released, the CME Fed Watch tool showed that rate-hike expectations remained above 90% for the long term. The two major developments did not exceed market expectations. Once the negative news was realized, investors’ panic sentiment faded quickly.
A series of multiple positive developments have come through one after another, further boosting the market: the SEC issued a five-year innovation exemption policy, allowing tokenized U.S. stocks to be traded on compliant AMM platforms; the CFTC submitted crypto market regulatory rules for review by the White House; and on Friday, there were also $433 million in inflows into spot Bitcoin ETFs. With multiple positives stacked together, BTC rose by about 10%, reaching a high of $86,000; ETH rose in tandem by 10%, and the altcoin sector overall gained nearly 15%.
However, GSR also points out risks. This round of price increases is mainly driven by leveraged funds and short-covering, rather than large-scale inflows of incremental capital from outside the market. The current funding rate annualized reaches 7.5%, and the open interest as a share of total market value rises to 2.7%. Both figures are close to their one-year highs. Market speculation surges, and the risk of a pullback increases in parallel.
There is another side to the data. Spot Bitcoin ETFs saw a net outflow of $400 million over the entire week, and the stablecoin issuance volume only slightly recovered. This suggests that funds from outside the market have not entered in a big way, and the foundation of this rebound is not solid.
For crypto traders, this market move once again proves the saying: “When bad news is out of the way, it becomes good news.” After uncertainties such as regulation and macro rate hikes are realized, the forces that suppress the market in the short term weaken. But in a high-leverage environment, price fluctuations on the screen will be very intense. Once the news cycle turns, prices can easily retreat quickly.
Remind everyone not to chase gains blindly, take a rational view of this rebound, and be alert to the violent swings caused by a leveraged market.
Risk Warning: Cryptocurrency prices can be extremely volatile. This article is for informational interpretation only and does not constitute any investment advice.