After a week of lackluster price action, sellers of risk assets are taking a break on Friday. The crypto markets have seen significant gains, with Bitcoin reaching over $85,000 at one point during U.S. hours and currently trading at $84,400, up 4.7% in the past 24 hours. All cryptocurrencies in the CoinDesk 20 Index have also seen gains, with Chainlink’s LINK, Solana’s SOL, and SUI leading the way.
At the same time, traditional markets have also shown an appetite for risk, with the S&P 500 and Nasdaq indexes up 1.7% and 2.3% respectively. Gold, which had outperformed Bitcoin in recent weeks, dropped below $3,000 after briefly crossing that level yesterday.
Paul Howard, senior director of crypto trading firm Wincent, noted that the recent market bounce is likely due to macro news around risk assets such as inflation and tariffs, as well as a more stable base for cryptocurrencies following recent drawdowns. He mentioned that $2.6 billion in leveraged crypto derivatives positions have been liquidated in the past week, primarily long positions, which has helped reduce excessive leverage in the market.
Can BTC bulls reclaim the 200-day moving average?
Today’s bounce has pushed BTC back above its 200-day moving average after briefly dropping below it for the first time since last August’s correction. Closing above the moving average, currently at $83,767, would be a positive sign for bulls, indicating that the worst of the correction may be over. However, failing to stay above this level could signal a deeper pullback.
Well-known cross-asset trader Bob Loukas noted that both Bitcoin and stocks have room to grow further before potentially reassessing market conditions. He mentioned that it feels like the panic may be ending for now, with a few weeks of recovery ahead before the market reevaluates.
