XRP and BNB Rise as Bitcoin Bulls Regroup for a Push Toward $90K Post-Selloff

Bitcoin and Major Cryptos Rebound After Tuesday’s Sell-Off

Bitcoin (BTC) climbed back toward $89,000 during Asian trading hours on Wednesday, recovering from a 24-hour low of $86,200. This modest rebound helped lift market sentiment slightly, with major cryptocurrencies also showing signs of stabilization following Tuesday’s widespread sell-off.

XRP and BNB Chain’s BNB led the market’s recovery efforts, as traders attempted to shake off the previous day’s turmoil. Tuesday’s downturn saw the total cryptocurrency market capitalization plunge by as much as 10%, with over $1.2 billion in bullish liquidations.

XRP recorded a 3% gain, while BNB and Solana’s SOL rose by 5%. Dogecoin (DOGE) and Cardano’s ADA saw modest increases of 1.2%, whereas Tron’s TRX remained in negative territory, down 5% over the last 24 hours. Meanwhile, the CoinDesk 20 (CD20) index, which tracks a broad range of cryptocurrencies, was down by 2%.

Market Rebound in Line with Previous Analysis

The bounce-back aligns with a CoinDesk analysis from Tuesday, which suggested that a five-month low in sentiment indices, coupled with large-scale liquidations, indicated that assets were oversold and poised for a potential short-term recovery.

Gold, which saw a 1.3% decline on Tuesday following a profit-taking event after hitting a new all-time high on Monday, also edged higher during Asian trading hours on Wednesday.

Macro Factors Driving Market Movements

Tuesday’s steep decline was fueled by several macroeconomic factors, including significant outflows from Bitcoin exchange-traded funds (ETFs). Over the past two weeks, more than $1 billion has been withdrawn from these funds, weighing on Bitcoin’s price. Additionally, a stronger Japanese yen—often viewed as a safe-haven asset—contributed to pulling down riskier investments such as cryptocurrencies.

Despite these headwinds, expectations for a looser U.S. Federal Reserve monetary policy have been rising. Prediction markets now suggest a 30% probability of a rate cut in May, while the likelihood of two rate cuts by June has more than tripled to 15%.

This shift in expectations follows the latest U.S. consumer confidence data, which showed its steepest decline since August 2021. The confidence index dropped by 7 points in February to 98.3, marking its third consecutive monthly decline. Such economic indicators often influence cryptocurrency prices, as traders adjust their strategies based on the potential impact on retail investment.

Traders Remain Cautious Amid Institutional Uncertainty

While some traders are hopeful for an altcoin rally, inflows of fresh capital appear to be directed primarily toward Bitcoin. The leading cryptocurrency recently broke below the $90,000 level for the first time in a month, triggering more than $200 million in liquidations over the past few hours.

Market sentiment remains cautious, particularly in the wake of former U.S. President Donald Trump’s decision to impose new tariffs on Canada and Mexico while also restricting Chinese investments. These developments have added to global market uncertainties, affecting risk-on assets like cryptocurrencies.

Singapore-based QCP Capital noted in a market update that equities, fixed-income assets, and gold have largely brushed off the macroeconomic factors that were previously blamed for market weakness. However, Bitcoin has remained relatively flat. “Rising BTC dominance and declining altcoin prices suggest that alt bulls may already be fully invested, with any new capital flowing exclusively into BTC,” the firm stated.

Additionally, concerns are growing about the sustainability of institutional demand. Recent Bitcoin purchases have been largely driven by companies such as Strategy (formerly MicroStrategy), which have financed their acquisitions through equity-linked note issuances. However, with crypto-related equity issuance accounting for nearly 19% of total issuance over the past 14 months, the market for such financing could be reaching a saturation point. If institutions slow their Bitcoin purchases, demand could weaken, potentially pressuring prices further.

As the market digests these factors, traders remain cautious, watching for signs of sustained recovery or further downside pressure in the coming days.

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