A cautious sense of optimism has returned to the global crypto market. XRP surged by 5% to hit a USD 3.00 price level, outclassing other major cryptocurrencies.
Bitcoin went above USD 114,600, recovering from recent weakness brought on by ETF outflows. Meanwhile, Ether had reclaimed USD 3,550 after having had net redemptions of USD 152 million.
The wider altcoin sector rallied as investors digested fresh updates on macroeconomic and trade policies. However, some clouds are still there, as Trump’s tariff policies and the Fed’s hesitancy clear the path at the time for bearish sentiment.
What Caused the Sudden Crypto Turnaround?
Prices rebounded strongly in the crypto market following Friday’s sell-off that rattled investor confidence. Last week, Bitcoin slipped below USD 112,000 amid ETF outflows close to USD 1 billion.
Despite the pressure, liquidity seemed to have improved in early Monday trading across all major pairs. Institutional platforms spread the selling pressure fairly evenly without allowing sharp price crashes.
Speaking of softer-than-expected U.S. job numbers, sentiment was thus supported by hopes for policy assistance. Still, traders seem wary of near-term headwinds spawned by recent political and economic developments.
XRP Outperforms as Traders Rush Into Altcoins
XRP first rallied 5% to hit USD 3.03 before settling near USD 3.00. Dogecoin, too, rose by 5%, as the retail traders started shifting back to the riskier, so-called high-beta assets. Solana, Cardano, and BNB gained comfortably above 3% during the early Asian hours.
The movement in the altcoin price was assisted by increased volumes and covering shorts. The bulk of this rally seems to be technical, without any clear indication that the long-term fundamentals have changed.
Nonetheless, these actions signal the entrance of buyers into the market after last week’s retreat.
Why Are Tariffs and Fed Policy Weighing on Markets?
The new trump tariffs rattled risk assets around the world, including digital tokens. These proposed tariffs have their targets set against all imports from Asia and the European Union alike.
Expectators worry that they may fuel inflation and cause the central banks to take one step back in their policy stance. Federal Reserve officials now consider shirking their previous intention to cut rates in September.
The change has come after hotter-than-expected inflation data came in, coupled with a shockingly weak jobs report, one development after the other. Together, these developments raised investor concerns about near-term financial conditions.
Institutional Liquidity Helped Prevent a Meltdown
Unlike earlier cycles, liquidity this time was deeper through institutional trading desks. According to Augustine Fan of SignalPlus, “secondary liquidity is way better than pre-ETF periods.”
This helped to keep the downside risk capped with prominent Bitcoin and Ether ETF outflows. Pro-trader desks topped up bids all through major exchanges and OTC platforms.
Hence, orderly recovery and smaller bid-ask spread. A dynamic mature enough to let shocks of a macro nature stir in the market with less volatility.
What Lies Ahead for Crypto in Q4?
The prospects for Q4 remain very sensitive to developments around U.S. policy and inflation. Markets look toward the September Federal Reserve meeting to shed some light on possible intentions.
Rate policy will probably be governed by wage inflation and energy prices in the months to come. Meanwhile, Trump’s campaign rhetoric has rekindled fears of trade fragmentation and capital flight.
All of which could hamper institutional flows into crypto products in the short run. In any case, as per some analysts, upside is expected, especially if rate cuts commence toward the late Q4.
Is the Bull Market Still Intact?
The possible bounce from a strong macro shock shows that markets can survive in such sudden market conditions. Bitcoin getting back into the 114,000 USD range shows strong mid-range support. Yet, the current rally cannot boast of any big ETF flows like the ones it enjoyed earlier this year.
Investors keep cool, now with elections and economic data still ahead. If the altcoin activity continues, this will be a strong signal signifying risk-on, but a follow-through is necessary to cement momentum.
Unless the signals emanating from central banks become more obvious, one cannot say plainly that a bull run in crypto is indeed happening.
Also Read: XRP set for rebound as market signals turn bullish
Crypto Resilience Faces Global Tests
XRP surged about 5%, and Bitcoin touched 115,000 USD to show the subtle resilience of the current crypto market. Those retail traders caused the altcoin price to shoot up, with institutional desks stepping in to provide vital liquidity.
Still, broader risks will persist under the shadows of Fed uncertainty and the Trump trade agenda. How the market deals with Q4 macro turbulence will probably define the next major crypto trend.
